December 1, 1999 8:00 AM PST

Barnesandnoble.com tests 24-hour delivery service

Hoping to put a dent in Amazon.com's dominance in the virtual world, Barnesandnoble.com has been quietly testing a service to deliver books purchased from its Web site within a 24-hour period.

Without alerting buyers, the online bookseller has been delivering books using messengers on bicycles, on foot, by subway, and in delivery vans to bring near instant-gratification to its customers who order books online in Manhattan.

The company said the 24-hour delivery does not cost customers anything extra on top of the $3.95 charge for standard delivery. Barnesandnoble.com also said that its cost for using the courier service is similar to what they pay for standard postal services.

Net retailers use same-day delivery to compete "The lack of immediacy that plagues most Internet retailers is a significant inhibitor to purchase," said Ken Cassar, an analyst with New York-based research firm Jupiter Communications. "I have long felt that we will see inventory get closer and closer to the customer and I think this is an early example of that trend starting to occur."

The company said that if the test period is successful, it may expand the program to other cities, going as far as delivering books from its stores in areas where it doesn't have warehouse distribution facilities.

With a network of more than 500 retail Barnes and Noble superstores dotted across the United States, a successful 24-hour delivery service could present a challenge to Amazon.com.

Amazon.com, the Net-only retailer that left Barnes and Noble scrambling to play catch-up in the virtual world, could not be reached for comment at this time.

"It is a test project at this point," said Gus Carlson, a Barnesandnoble.com spokesman. "But it is a clear differentiator for us from all our competitors, big and small."

With Internet commerce players increasingly focused on issues surrounding distribution, warehousing, inventory and delivery, analysts believe that Barnesandnoble.com's ability to leverage its parent company's stores could be a strong advantage in cutting into Amazon.com's lead.

While both Amazon and Barnesandnoble.com charge $3.95 for three-to-seven day standard delivery, overnight fees are substantially higher at $10.95 for one book.

There are a few online services, mostly dealing with Internet grocery shopping, that try to speed up home delivery. There is also a growing crop of convenience companies like New York-based Kozmo which deliver videos and other products to a user's door.

"There really is a big opportunity with brick-and-mortar presence to start to leverage that physical presence by shipping products out of their stores," added Cassar.

Barnesandnoble.com is using the Early Bird courier service in Manhattan. The courier sends vans to the bookseller's distribution center in New Jersey at 6 AM and 1 PM ET to pick up the books that have been ordered. Back in the Early Bird distribution center in Manhattan, the courier service hands over the books to messengers who then proceed by bike, subway, and on foot to the final destinations.

Carlson stressed that it is in fact not a same-day service but strives to deliver books within a 24-hour period.

Amazon.com and Barnesandnoble.com are also battling in the Courtroom, with Amazon alleging that the rival book and music e-tailer illegally copied one of Amazon's patented technologies.

 

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