This is a guest comment by Santosh Sahu, CEO of On the dot, sharing his thoughts on how retailers will compete with Amazon’s desire to introduce one-day prime shipping in the US with an $800 million investment in Q2 2019 alone.
Is one-day Prime shipping a killer move by Amazon? Will other retailers be able to compete?
The move to one-day Prime shipping by Amazon is a serious wake up call to retailers. The household names we know and love in retail, both online and offline, have been relying on the loyalty of consumers for too long. This new development drives already high pressures even higher for retailers looking to match Amazon’s commitment to convenience, underlined by its unrivalled delivery options for its customers.
But hope is not lost. High street retailers are well placed to compete. Their physical footprints put them closer to their customers than online giants like Amazon – stores can become delivery fulfilment hubs – allowing them to quickly close a widening gap between them and their online rivals. In the current climate, consumers are time-poor and convenience-driven. It’s very simple. Online or offline, shoppers will always opt for retailers who can do one thing: make it easy to buy, exchange and obtain products. Rapid and convenient delivery is a must.
Can other retailers offer express or same-day delivery without making a $800m investment like Amazon?
Retailers don’t have to break the bank to provide the same delivery experience to customers that Amazon does. Today’s API economy means that retailers can easily, readily and efficiently access partnerships with technology specialists that can support same-day and next-day initiatives through intelligent scheduling, keeping operational costs low.
Also, the majority of Amazon’s $800m investment is being allocated to the creation of local fulfilment centres. Most don’t realise that retailers already have this infrastructure in place – they already have stores, which already significantly reduces the size of the investment required.
Does faster delivery mean more CO2 emissions?
Nowadays, faster delivery doesn’t necessarily have to equate to more CO2 emissions. There is a plethora of eco-friendly alternatives to cars which are now available such as, cargo bikes, ebikes and pushbikes for final mile delivery from store to home. These alternatives are just going to rise in popularity.
This is a killer move because all the non prime members will convert to being prime members where they then become loyal to Amazon and make more purchases. One day delivery helps to secure the impulse buyers because the item is delivered the next. Also businesses that buy from Amazon will find one day delivery very usefull.
This move by Amazon destroys Wal-Mart in store click and collect because it takes 2-3 days to be in store for collection. Where as Amazon will deliver in 1 day
The previous article seemed to suggest it was an aim/aspiration and would (if it happens) take some time. Could this Amazon announcement be intended to cause a distraction from certain legal/regulation/tax issues that are currently making headlines? It’s what I would do in their shoes.
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