Donna Iucolano, vice-chairperson of Shop.org, an Internet retailing trade organization, and former chairperson of its research committee, spoke with Inc. magazine about the recent expansion in same-day Web delivery services.
Inc.: Are there a lot of same-day delivery start-ups out there?
Iucolano: There is a great deal of focus on delivery and fulfillment, and I would say that has come about as a result of activity in the last 18 months. Most Internet retail was very much focused on the front-end activities -- the look and feel of the Web site, taking and processing an order -- and in reality that was 50% of the battle with respect to what the customer wanted. The stumbling block was on the back end, with respect to being able to actually deliver the finished product to a consumer.
Inc.: Then is the potential market the whole of Internet retail?
Iucolano: I don't think it's that big. It's sort of like the FedEx model of a few years back. You used to put a package in the mail, and it got there when it got there. Then FedEx in its brilliance convinced us that we had to have it overnight. So it created a market. It's really interesting how a lot of these products and services create their market just because they exist.
Inc.: How's that?
Iucolano: Given the choice of having a book in two days or having it in an hour -- well, you probably never thought of having it in an hour, and all of a sudden it's available to you. Right now the market for same-day delivery is probably relatively small, but it's one of the fastest-growing areas of opportunity. Internet companies are all taking and processing orders, but they're all spending a ton of money to do that. It's too early to tell who the winners might be.
Inc.: What do these companies need to succeed?
Iucolano: Customer demand. The customers have to be convinced that they really need things the same day, outside of the floral business and the gift business. Video and food make a lot of sense. Anything else that's going to work will be products that consumers latch onto and say, "I need that right now!" whether they really do or not.