Will same-day delivery make for a merry Old Navy Christmas?

Discussion
Photos: Old Navy; Postmates
Dec 11, 2019
George Anderson

Old Navy needs a win. It is coming off a third-quarter during which same-store sales declined four percent, and the clothing chain is still looking at a 2020 spinoff by its parent company, Gap Inc. One piece of the retailer’s game plan to turn its fortunes around in the fourth quarter is same-day delivery of online orders.

Yesterday,  Old Navy announced the launch of same-day delivery in partnership with Postmates. The retailer, which currently offers free same-day pickup on online orders in its stores, is looking to give its customers more options, particularly as time, or the lack thereof, becomes more of a pressing issue with Christmas two weeks away. 

As an added perk, the service, which costs $8.99 per delivery order, will be free to Old Navy customers from Dec. 21 to 23. 

“We’re always looking for ways to create an incredible shopping experience for our customers regardless of where, when and how they choose to shop with us. Last year, we launched Buy Online, Pickup In-Store, offering customers the option to pick up an online order in their local store within two hours,” said Jamie Gersch, Old Navy CMO, in a statement. “Partnering with Postmates to provide same-day, on-demand delivery creates an even deeper convenience proposition during the bustling holiday shopping season.”

Old Navy customers can place their orders for same-day delivery by going to OldNavy.com and clicking on the buy online, pick up in-store option. They will have the option of choosing Postmates to deliver their purchases when they are notified that their order is ready for pickup. The Postmates offer is open to customers placing orders within a nine-mile radius of a local Old Navy store.

DISCUSSION QUESTIONS: What do you think about Old Navy’s timing of the announcement that it is offering same-day delivery two weeks before Christmas? Will offering same-day delivery from local stores help Old Navy boost sales during this critical period, or is the value more long-term?

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14 Comments on "Will same-day delivery make for a merry Old Navy Christmas?"


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Mark Ryski
BrainTrust

Same-day delivery … so what? Shoppers already expect this from Amazon and the other leading retailers, so I doubt that this will have much impact – except on Old Navy’s bottom line which will get hammered by the added expense of same-day, in addition to the impact of managing returns. Delivering product from local stores is a logistical detail that customers don’t care about. Old Navy’s move to same-day during the holidays is nothing more than a “me-too” move.

Carol Spieckerman
BrainTrust

Although BOPIS makes sense, same-day delivery is a perilous path for Old Navy. Old Navy’s quality and sizing can be quite uneven so same-day delivery is a two-way ticket to massive returns. Also, who really needs an unwrapped hoodie or pair of pajamas, stat? Is Old Navy offering free returns? If not, it’s a hassle for customers. If so, it’s a drain for Old Navy. I’m all for retailers building portfolios of complementary convenience options, but this feels like an afterthought. Of all the power moves Old Navy could have made for the holidays, same-day delivery isn’t one of them.

Neil Saunders
BrainTrust

Same-day delivery will not be unhelpful – but “slow delivery” is not the reason for Old Navy’s current problems, so speeding things up is not the solution to poor growth. At the root of Old Navy’s current woes is range: the last few seasons have had fewer store fashion edits and some of the traction the brand used to have with consumers has been lost. On top of this, a super-competitive environment and weak demand for outerwear have been unhelpful. In short, Old Navy needs to focus more on what it sells rather than how it sells it if it’s to get back on the front foot.

Stephen Rector
BrainTrust

As we near the final days of the shopping season, will this make the consumer shift their dollars to Old Navy from another store? I don’t see it happening. The only thing I see happening is a shift of sales from the Old Navy store to oldnavy.com.

Suresh Chaganti
BrainTrust

I don’t see this as a differentiation. Sure, it will shore up sales and attract last-minute shoppers, but it comes at a cost, and is certainly not sustainable. Structural issues cannot be overcome by extremely tactical/stop gap measures like these.

Gene Detroyer
BrainTrust

I think the timing is perfect. Now I know if I need a present and I need it today, I go to Old Navy. What I don’t know is if I will really get it today.

Andrew Blatherwick
BrainTrust

This is a change that could push Old Navy further to the edge, the cost of the delivery being taken directly from their margin will be one hit but also they will reduce the number of customers coming to their stores to pick up online orders. What we do not know is how successful their BOPIS development was and how many customers it drove to the store but this must be a risk.

Are Old Navy customers crying out for same-day delivery to their homes? Has the research been done to identify that this is their problem? If not then this looks like a shot in the dark which could prove very costly. The fact that Amazon and Walmart offer this does not make it the answer for all retailers, especially as Old Navy does not really compete in this space. If it is a last resort and purely for marketing then someone needs to count the cost at the end of the period. If it works can they afford to continue with it?

Lee Peterson
BrainTrust

Same day? What’s next, 10 minutes? I don’t know, but to me, if I wanted something from Old Navy (which my daughters call “Old Lady”), a day or two would not make a difference, unless I’m late enough to have to do it on the 24th. The real question is; do I want something from Old Navy at all?

Kathleen Fischer
BrainTrust

The timing is perfect. A recent consumer survey indicated that 66 percent of consumers were likely to choose a retailer offering same-day delivery over one that doesn’t offer it. As we get closer to Christmas, same-day delivery becomes even more important for last-minute shoppers and adds another fulfillment option for customers who don’t want to battle in-store crowds.

Bob Phibbs
BrainTrust

Sounds more like their way to further sabotage earnings for Q4 for Gap than any game-changer.

Richard Hernandez
BrainTrust

With most of the store being 50 percent off, they would definitely have to sell A LOT more to offset the investment in same-day delivery. I just don’t see it. While they do need a win, this isn’t it.

Ken Cassar
BrainTrust

Those opposed to this deal are, I think, assuming that this adds significant incremental cost or effort for Old Navy. It does not. Old Navy already fulfills online orders from stores through click and collect and they are charging $8.99 for deliveries that Old Navy employees are not delivering. This is a safe, tactical move. I don’t believe, though, that the upside will be significant because I suspect that people are willing to wait a few days for apparel. But none of us know for sure in this environment where consumer expectations are changing so rapidly, fueled mostly by Amazon. I’d have done this deal were I in Old Navy’s shoes.

Jeff Sward
BrainTrust

This sounds like a high-risk/low-reward move. Doesn’t sound like it moves the needle on sales. Doesn’t sound like a money maker … quite the opposite. And any missteps or missed deliveries right before Christmas will have customers in apoplexy.

David Naumann
BrainTrust

Free same-day delivery from Dec. 21 to 23, seems like a cost prohibitive proposition for Old Navy and may be a logistical problem if they have high demand. Over promising and under delivering around the holidays is not acceptable. While it is an investment by Old Navy to eat the delivery costs during these days that can spur incremental costs, the risks may outweigh the rewards.

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