In Depth

Big-Name Delivery Services Helping Small Retailers

As the holiday retail season heats up, there are a number of predictions around the strategies that will result in success for brands during one of the most important seasons in retail. A lot of focus has been placed on who will be open on Black Friday and the Thanksgiving holiday itself, as big retailers fight for consumer attention and a bigger piece of the holiday revenue pie.

But among a general consumer population that increasingly expects to have what they want, when they want it, when they can go to a store to buy gifts may be far less important than when they can have a gift delivered to them. In that arena, local independent retail businesses may have a distinct advantage. While larger retailers have been focused on hours of operation and getting ready to launch holiday specials earlier and earlier, smaller retailers and independent business owners have been connecting with new services like UberRUSH, Amazon On Demand and, most recently, Etsy ASAP. That means the real retail story of this holiday season may just be about on-demand delivery.

This week Etsy, the handcrafted artisan and vintage seller marketplace behemoth, announced it would be unveiling a same-day delivery service during the holiday season. In partnership with delivery startup Postmates, Etsy ASAP will offer shoppers in select parts of Manhattan, as well as Brooklyn and Queens, same-day and next-day delivery of the site’s vintage and handmade items from local sellers for a flat fee of $20. The program is currently in an invite-only pilot mode for sellers, with 5,000 items currently available to buyers.

Etsy’s longstanding mission has been to connect buyers with local artisans and sellers in order to create communities around their offerings, and many of their recent product innovations have done just that. The company recently unveiled a new set of tools for sellers to share updates from their shops, helping them to craft a more compelling story about their business and engage potential buyers. The launch of same-day delivery seems to follow in that same vein.

“Etsy continues to build features that connect buyers and sellers locally online and off,” Calia Talmor, senior product manager at Etsy, said in a recent blog post on the site. “The Etsy ASAP pilot follows the recent launch of the new Etsy Local mobile experience that helps shoppers on the go find Etsy items and sellers nearby, at both events or local shops. Similar to experiences like those at craft fairs and markets, Etsy ASAP makes it easier for shoppers to discover and support local makers.”

While the delivery trend has been steadily growing in the dining and grocery sectors for years — with everyone from Amazon to Target getting in on the delivery action — delivery services have been slow to creep into nonessential retail niches like fashion, home goods and accessories. Part of that may be a perception of value and the price consumers are willing to pay for convenience.

As a recent New York Times article points out, these services also come at a premium price and one that some service providers are far more transparent about than others. For “necessity” items like food and pantry items, consumers have been willing to pay up for charges, delivery fees and tips for the convenience they provide.

Whether that sentiment will carry over into retail remains to be seen. The holidays seem like a great time to test that consumer threshold and undoubtedly factors into the recent launches and expansion of similar services from Amazon and Uber. With the holidays increasing the pressure and forcing busy consumers to shop on a strict timeline, consumers just may be willing to pay for the convenience of checking a to-do off their very full holiday list. However, Etsy is uniquely positioned in the market, as its handcrafted service not only allows last-minute shoppers to cross off items on their list but also imbues their gifts with a personal artisan touch that carries with it an element of thoughtfulness.

Etsy is also at a distinct advantage over larger retailers when it comes to managing inventory for these types of services. The fact that fulfillment is left in the hands of individual shopkeepers means they are able to control the flow of supply and demand on a case by case basis, making the ultimate determination of whether they can fulfill an order within a certain timeframe. According to Etsy’s blog, once a shopper selects Etsy ASAP at checkout, they can choose from three hour delivery windows, based on the seller’s availability. Sellers then have total control and flexibility to set their pick-up availability and change it at any time.

Limiting the launch to a small, yet densely populated, geographic area also helps them manage the logistics around such an offering. If the company can pull it off in this beta, the potential upside is huge for both Etsy and the individual sellers, as the holidays are hands down the busiest time of year for these independent businesses.

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PYMNTS STUDY: THE CROSS-BORDER MERCHANT FRICTION INDEX – JUNE 2020

The PYMNTS Cross-Border Merchant Friction Index analyzes the key friction points experienced by consumers browsing, shopping and paying for purchases on international eCommerce sites. PYMNTS examined the checkout processes of 266 B2B and B2C eCommerce sites across 12 industries and operating from locations across Europe and the United States to provide a comprehensive overview of their checkout offerings.

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