Commerce Weekly: Same-day delivery war heats up

The same-day delivery battle, NFC in vending machines, and Google as information central for holiday shoppers.

Here are a few stories that caught my attention in the commerce space this week.

The high price of instant gratification

The Wall Street Journal’s Greg Bensinger took a look this week at the e-commerce same-day delivery trend, a service eBay, Wal-Mart and Google have been experimenting with in order to better compete with Amazon, which has offered same-day service in select locations since 2009.

The obvious benefit for e-commerce retailers is being able to improve the customer experience — providing the convenience of online shopping with the instant gratification of brick-and-mortar shopping. The biggest obstacle is cost. EBay, for example, has hired couriers, paying $12.50 per hour and 55 cents per mile, Bensinger reports, but only charges $5 to deliver a minimum $25 order. Industry analyst Kerry Rice told Bensinger, “Retailers are clearly subsidizing this service to improve the customer experience. Amazon created this monster and everyone has had to jump on board to compete.”

Amazon operating at a loss to draw consumers into its ecosystem is pretty par for its business model, and its deep pockets mean companies are going to have to get creative to successfully compete. Wal-Mart is perhaps in the best position not only to compete with Amazon on this front, but perhaps even overtake and lead the same-day delivery field. Walmart.com chief executive Joel Anderson highlighted for Bensinger Wal-Mart’s advantage: “We have 4,000 Wal-Mart stores and local goods within five miles of most customers.” Each store basically serves as an online distribution center, a scale that Amazon could be challenged to meet, even taking into account its aggressive distribution center expansion plans.

In related news, Google reportedly shelled out more than $17 million to buy Canadian locker storage startup BufferBox this week. As many outlets reported, Google may be positioning itself to compete against Amazon’s Locker delivery service, which allows customers to have goods delivered to secure pick-up stations rather than home addresses.

NFC payment innovation charges ahead, despite obstacles

Despite recent research indicating Apple’s decision to exclude NFC technology from the iPhone 5 has set the NFC payments market back by two years, NFC payment innovation continues. This week, mobile wallet platform Isis teamed up with USA Technologies (USAT) to bring mobile payment technology to vending machines in Salt Lake City and Austin, Texas.

Nick Summers reports at The Next Web the technology will be installed in 7,500 machines that “will accept credit using USAT’s ePort Connect service, which already supports NFC-enabled devices, as well as payments from PayPal and Google Wallet.” As Summers notes, however, the Isis Mobile Wallet app is available only for Android platforms at the moment.

In other NFC news, The Next Web’s Jon Russell reports that digital security company Gemalto announced major partners this week for its UpTeq NFC payment system for mobile SIM cards: American Express, MasterCard and Visa. Russell writes that the payment system uses NFC technology already present in mobile SIM cards, so customers won’t need to worry about external hardware or plug-ins to make payments, redeem coupons, or participate in loyalty programs. The technology is being customized for KDDI in Japan, Rogers in Canada, and Orange in France, according to Russell’s report.

Google aims to be information destination for holiday shoppers

AdAge’s Natalie Zmuda took a look this week at Google’s various holiday retail strategies and how its angling to “become shoppers’ information destination.” Zmuda highlights several newly launched tools that aim to service emerging consumer shopping behaviors that merge online and offline environments. Tools include its 3-D holiday toy collection, indoor maps for select malls and retailers, and its new Shortlists tool. Zmuda notes that “[by] consolidating all of the tools a shopper might want to use in one place, Google is cultivating loyalty and, ultimately, increasing activity into its paid product listing ads.”

Google Shopping VP Sameer Samat told Zmuda that Google’s vision focuses on the big picture: “If we’re helping consumers be more effective in shopping and more activities, they will find Google more relevant and valuable as a company. That’s a good thing for Google, long term.”

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