USPS Delays Same-Day Trial

Written by Frank Hayes
December 12th, 2012

The U.S. Postal Service isn’t starting same-day deliveries for retailers this week after all. The test of the service in San Francisco, dubbed Metro Post, was slated to start on Wednesday (Dec. 12) but has now been pushed back to next week to allow “time for participating retail partner(s) to come online with Metro Post,” according to a USPS spokesman.

That’s bad news, not just for this same-day test, but for the eight to ten chains that reportedly signed up for the trial who will lose days’ worth of deliveries on the critical run-up to Christmas Eve.

Delaying a test for a week or even a month at any other time of the year is usually trivial. But this delivery trial was set to start less than two weeks before Christmas. The first week should have been a shakedown period, with the big push expected in the final days before the holiday. Now the first week will be the final days before the holiday.

The problem isn’t that San Francisco will be short of options for retailers who want to try same-day delivery. Right now, eBay and Walmart are already running trials in SF—eBay uses hired-for-the-test couriers while Walmart uses its own trucks. Google is doing a much more limited test that’s primarily just for employees. UPS and FedEx both offer same-day delivery in the city, and a U.K.-based company called Shutl will start deliveries in San Francisco and New York early next year, using existing same-day courier services. (Amazon also does same-day delivery in 10 other cities, but not in California).

Put simply, San Francisco is saturated with same-day opportunities. Not really a surprise: The fact that it’s a densely populated, affluent and tech-heavy town makes it a best-case scenario.

But there’s also a best-case time window for any test like this. December is when the big demand will be, and that’s when retailers can determine profitability. If same-day delivery isn’t worthwhile during the holiday buying season, it never will be.

That’s the window that’s closing on the USPS. And there’s a hint of more trouble for the trial: The mail agency also plans to release “details about the first partner to sign on to offer Metro Post next week to coincide with the launch,” said USPS spokesman John Friess.

Just the first partner? If there’s only one retailer who was ready to jump on the service on Day 1, that could explain the delay—it wouldn’t make any sense for the USPS to launch the service until someone is ready to use it. But it also brings up the chicken-and-egg nature of any big shift of this kind. Chains appear to feel the same way about same-day delivery that customers feel about mobile payments: They think it’s a fine idea as long as somebody else goes first and tests it.

After all, if Amazon really has been doing this for years and hasn’t made a big success of it, what’s the point of a cash-strapped chain making a big investment to try it?

That thinking may be dangerously wrong-headed.


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