How does One-Day Shipping Impact Retailers
Since the very start of the ecommerce industry – the very first order ever placed via the internet – companies and shippers have been working together to ensure items get to customers in a timely and affordable way. These days, Amazon leads the pack, and their promise to make one-day delivery available to more customers this year may have some unpleasant implications for the likes of Walmart, Target, FedEx, UPS, and perhaps even the USPS.
What Led to One-Day Amazon Delivery?
Amazon has been in business for a long time, and back in 2011 and 2012, it promised consumers across America fast delivery unlike any other company could offer. Unfortunately, Amazon couldn’t live up to this promise for a time, and its founder, Jeff Bezos, decided to take matters into his own hands. To make certain that his customers got the items they ordered quickly and efficiently, Bezos played a huge role in blanketing the entire nation with Amazon fulfillment centers, sorting centers, trucks, vans, and more. This incredible growth focused primarily on Prime customers, who now pay $119 a year for completely free one-day delivery of a huge selection of Amazon-fulfilled items.
How One-Day Delivery is a Threat to the Rest of the Industry
The truth is that Amazon is now worth over a trillion dollars, and that gives it certain privileges that other companies – including the likes of even retail giants like Walmart – simply cannot afford. Amazon has invested in a variety of new technologies that allow it to complete one-day deliveries in a huge variety of US locations, and unfortunately, these delivery options no longer include the likes of UPS, FedEx, or even USPS. Amazon is utilizing everything from couriers to delivery drivers and even drones to handle its deliveries. For shippers that have long relied on consumers’ use of Amazon to keep them busy (and paid), this shift could be significantly detrimental.
Amazon’s Unprecedented Steps
After the 2013 Christmas holiday fiasco in which the usual carriers simply couldn’t keep up with demand and numerous packages arrived too late for Christmas despite Amazon’s promises, the company made some serious changes.
- More fulfillment centers – Amazon had roughly 65 centers prior to the end of 2013, and shortly thereafter, that number was increased to 400.
- More delivery options – The retail giant paid its own employees $10,000 to become what they called “delivery entrepreneurs” who took it upon themselves to make certain that people got their packages on time.
- Rented jets – The company even went so far as to rent 15 Boeing 737-800 jets in addition to the five they already had – alongside 40 other large planes they already had in their arsenal – to move goods cross-country even faster.
Though retailers like Walmart, Target, and others may feel the burn of one-day delivery, others, such as eBay, are working on their own one-day solutions. Even so, delivery times are not the only things that keep customers coming back. Fortunately, loyalty is huge in the ecommerce industry, and that’s why despite the likes of Amazon, smaller ecommerce-based businesses can still succeed with simple efforts – even if it does take an extra day to get packages out to their owners.