Pretty soon, Americans will have no reason to leave their homes. We can order everything online and have it delivered to our doors – even groceries. That’s good news for package delivery companies, if not for Americans’ Vitamin D intake.
Attention has centered lately on grocery delivery, with the U.S. Postal Service unveiling its plans to get in the game. The Postal Service recently asked the Postal Regulatory Commission to let it expand its test with Amazon into a broader 2-year test available to other retailers. Under the test, retailers would drop off their grocery orders in color-schemed tote bags at local post offices between 1:30 a.m. and 2:30 a.m. Postal officials would map out the day’s deliveries and then city carrier assistants would load the trucks and deliver the totes between 3 a.m. and 7 a.m., leaving them at front doors. The carriers would use iPhones to scan for tracking purposes.
Given Americans’ love affair with food, grocery delivery seems like a safe bet. But it’s a fragmented market and some players already have a foothold in certain cities. Peapod, Instacart, and Fresh Direct are fairly well-established in some locations and work with many of the big name grocery stores. Walmart with its Walmart to Go and Safeway are testing delivery of groceries from their own stores in select cities.
Still the Postal Service, with its local presence and national reach, brings expertise as a delivery company to the table. Its ability to “dynamically route” the deliveries each day based on supply also helps. That is, it can adjust deliveries and routes as needed to achieve the greatest route density, which is critical to success. Further, this service would allow the Postal Service to use delivery vehicles when they normally sit idle, although extra wear and tear on its aging fleet could prove problematic.
If the Postal Service gets the pricing right, it could entice some retailers to give the service a try. But pricing is a big question: Can the Postal Service price it right? The market test should help answer some other questions: Will bags of groceries left unattended in the early morning hours be susceptible to theft? Has the Postal Service waited too long to enter the market? Or does its delivery expertise and presence in every community give the Postal Service a competitive advantage?