Commodity or customization: Is next or same day a necessary brand strategy?

Editor’s Note: Norman Katz, president of supply chain consultancy Katzscan Inc., writes a monthly column for Supply Chain Management Review. Katz’s column appears on the third Monday of each month.

According to a February 2024 press release by Roadie, a UPS company, announcing their report Is Same-Day Delivery Worth The Hype?, 80% of the companies surveyed reported increased revenue after implementing same-day delivery.  The report seemed to focus on retail companies, and did note that “operational costs rose for 79% of companies after rolling out same-day delivery.”

While 21% of companies did not charge customers a fee or raise prices, and 7% of companies actually lowered prices, most companies needed to offset the cost increases somehow, such as:

• 29% increased product prices to offset delivery costs
• 24% offered an initial free trial
• 17% charged a yearly fee
• 14% charged a one-time fixed fee
• 13% charged a per-order same day fee
• 13% charge a monthly fee

Delivering commodity products the same or next day seems to be where retail is headed, but is this really all that consumers want out of retail? Perhaps retail is setting an expectation that isn’t necessarily always what the customer always wants.  (Um … isn’t this what auto manufacturers are doing with EVs?)  

Take online women’s dress website eShakti (www.eshakti.com; this article is neither a promotion nor an endorsement of this company). After choosing one of the many dress fabrics, a woman can customize the dress style by selecting:

• Size
• Over 15 necklines
• Eight sleeve types
• Six lengths, customized to their height
• With or without pockets
• With or without side zippers

This completely customized product is not going to be delivered same day or next day; in fact, it is going to take several weeks to arrive.  But the dresses are reasonably priced and the product is custom-designed by the customer, so it will realistically be a perfect fit with the desired features upon arrival, thus worth the wait. Here, the expectation is established that the extended time to receive the product is acceptable because it is customized and not a commodity.

Brands might want to take note. Instead of creating generic finished products that need to ship immediately, perhaps offering customized products where the brand can build in extended time is a better offer, easier on operations, and creates a better perception. Could certain pet food, people food, furniture, lighting, apparel, or other products be manufactured in or at least final‑produced in the U.S. to customer specifications and then shipped? (Would at least a final U.S. completion enable the product to be “Made in The USA” certified? That designation might make a difference to your customers. I don’t know where eShakti products are produced.) 

Partially producing base products that are customized by the customer should reduce both stock‑outs and overstocks of finished goods. Forecasting customer demand is still required, but the brand should be able to pivot faster on how it uses and reuses raw materials and components based on what is and isn’t selling.

Since the days of 30-minute pizza delivery, our “we want it now” expectations as consumers have been molded to be shortened for commoditized products. And sometimes, this is okay. But is this all that we want, and all of the time? In a commoditized world, execution is the new competitive edge, but sometimes this requires differentiation. For brands, instead of trying to deliver the same thing quickly, maybe a better strategy is to deliver something different slowly. Remember: perception is often reality. 

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