The Retail Industry is Moving Quickly Towards Faster Product Deliveries to Win Over Customers
Same day retail shipping is starting to catch on among not only online retail industry giants like Amazon, but also among new movers into the space like Google Express and mass retailers like Macy’s. As a result, the same day shipping world is becoming a very dynamic environment.
The development of same day shipping on a large scale basis is in response to consumers who are demanding instant gratification while shopping from their smartphones or online. The following retailers are leading the pack in the race towards providing ever-faster delivery options.
- Amazon: As the dominant player in e-retail, Amazon started the trend towards faster shipping options with the introduction of same day shipping five years ago and with their Amazon Prime membership. For an annual fee, Prime members get free two day shipping on most products. Amazon has also introduced their “Get It Today” service in several metropolitan areas including New York City, Philadelphia, Dallas, Los Angeles, Phoenix, Seattle and the District of Columbia. Amazon’s strategy is to price this service attractively for both its Amazon Prime Customers as well as customers who are not Prime members. Same-day shipping rates start at $9.98 for the first item with an additional charge of $.99 for each additional item (a flat $5.99 for Prime members). Per Amazon, “[m]ore that a million items” are now available for same-day delivery. Groceries are not widely included in the Amazon strategy yet. However, the company is experimenting with same-day delivery of groceries in very limited markets with Amazon Fresh.
- Google Express: Google’s approach is different. Unlike Amazon, Google is not competing directly with retailers. Rather Google is providing a branded delivery service for retailers like Target and Costco. Google’s goal is to introduce consumers to what Google believes is the future of retail. Per Google’s Jenna Owens, GM Operations for Google Express, people are going to expect to be able to shop their favorite stores online and receive the products they have purchased that same day. The Google Express program utilizes third party delivery agents, trained by Google, and Google-branded vehicles to deliver retailers’ products to consumers, same day. Google is currently providing this service in San Francisco, San Jose, San Francisco, Manhattan (New York) and specific Los Angeles zip codes with planned expansion to Brooklyn and Queens in New York and further Los Angles zip codes. In addition, Google is now offering a membership based pricing structure of $10 per month or $95 per year for unlimited same day or overnight deliveries.
- Macy’s: Macy’s is the first of what is projected to be many traditional retailers who offer same-day service, and is currently testing same-day shipping utilizing several partners: FedEx, UPS and eBay. Macy’s has already improved its infrastructure to support same day shipping in several markets by expanding its fulfillment centers and using its click and collect service to adjust its in-store inventories based on item popularity. The Bloomingdale’s chain will also offer same-day deliveries in select markets.
The winners in the same day shipping race will ultimately be consumers. Consumers win by having access to the items they purchase almost as quickly as if they went into a store to buy it directly. Online retailers who are able to efficiently and consistently deliver products to their customers in the smallest window of time will gain more market share, making obsolete the traditional retailers who refuse to adapt to the evolving retail-scape. Consumer expectations are changing and those who don’t accept ever-faster shipping as the norm will ultimately lose the race.