San Francisco is quickly becoming the battlefield for Web home-delivery firms, as another competitor launched operations this week. Distribution firm Sameday.com announced that it has begun dispatching drivers in San Francisco to transport entertainment and convenience items and electronic products to customers' doors.
Recently, the number of home-delivery firms has swelled as a result of analysts' predictions that Internet users would embrace the idea of having someone hand-deliver their purchases. They also said companies such as Kozmo.com, online grocer Webvan and meal-delivery firm Food.com could generate a second and very lucrative revenue stream by delivering goods for other online merchants.
Sameday has seized on the latter idea. Its Web site hosts dozens of retailers from which customers can order goods and have Sameday handle the delivery. Sameday already operates in Los Angeles, where the firm is based.
"We are not Kozmo," said Andrew Krainin, the company's vice president of marketing. "Kozmo is a retailer, a kind of Blockbuster-meets-Pizza Hut. We are more like FedEx."
But while Krainin said Sameday expects to add to the number of retailers it delivers for, it should see competition from Web home-delivery services in the future. Analysts have said Web delivery services could create a lucrative revenue source by hiring their distribution networks out to other e-tailers.
Kozmo embarked on a business-to-business strategy in March by striking a deal to deliver books, videos and CDs for Amazon.com in the 10 cities that Kozmo operates in.
Sameday faces a host of competitors on the consumer end as well. Kozmo has built up a following in San Francisco by saying it will deliver entertainment and convenience items in one hour or less. And other home-delivery firms have begun encroaching on Kozmo's turf by offering entertainment items.
Webvan this week said it will stock videos, books and other entertainment goods. Online bookstore Barnesandnoble.com began same-day service to New York customers earlier this year. Analysts expect Food.com to begin offering videos and music sometime in the near future.
In March, Food.com attracted an $80 million investment from a group that included video-store chain Blockbuster.
Sameday said it will charge $4.95 for delivery and will not offer one-hour service. Customers must order items by 2 p.m. to receive them by 8 p.m.