5 Ways Retailers Can Compete With Amazon’s Same-Day Delivery Model
When catalog industry veteran Don Libey told attendees of the annual Catalog Conference in 1991 that the country is heading towards same-day delivery models, many seasoned catalog executives in the audience laughed. Now, more than 20 years later, retail giants like Amazon.com, Google, eBay and Wal-Mart are making same-day delivery a reality.
Amazon has even gone so far as experimenting with the idea of using drones to deliver packages under five pounds within 30 minutes. While this is a futuristic idea, Amazon's potential plans represent an underlying shift in consumer expectations around delivery times.
Aside from drone delivery, Amazon is investing billions of dollars in new distribution centers and storage locker pilot programs to reach metro areas, as well as big data and predictive analytics capabilities to understand which items are purchased together. But most retailers don't have the resources to make similar investments in same-day delivery capabilities.
So, how are small to midsized retailers supposed to compete with Amazon's same-day delivery model?
Does the Same-Day Shipping Model Work for Everyone?
Leveraging greater access to big data and more accurate forecasting capabilities, larger retailers will begin to offer same-day shipping to increase basket size, order frequency and convenience for customers. By shipping from local stores, retailers with multiple brick-and-mortar locations can immediately add new distribution points for same-day shipping instead of having to invest in costly warehouse infrastructure in every market.
Wal-Mart, for example, can reach two-thirds of the U.S. population by leveraging its 4,200 stores as distribution centers. Currently, 10 percent of all online orders from Walmart.com are shipped directly to consumers from a retail location.
Most small retailers lack the resources and store footprint to handle same-day shipping on their own. However, it's still possible for small retail brands to offer same-day shipping with the support of a third-party fulfillment and logistics provider.
Maria Haggerty is CEO and one of the original founders of Dotcom Distribution, a premier provider of B2C and B2B fulfillment and distribution services. She received her Bachelor of Business Administration from University of Houston, C.T. Bauer College of Business with a concentration in Accounting. Maria plays an integral role in developing and defining all aspects of the business, including sales and marketing, operations, finance and IT. As CEO, she is responsible for providing strategic leadership, establishing long range goals, and developing strategies for the senior leadership team. Maria has developed the systemic and procedural infrastructure necessary to provide timely and accurate analysis of budgets, financial reports and financial trends in order to assist the Board, senior executives and clients in performing their responsibilities while achieving favorable results. She works closely with the leadership team to enhance, develop, and enforce procedures that will improve the overall operation and effectiveness of the corporation. During her tenure at the Dotcom, Maria has developed an environment of continual improvement by supporting the Senior Leadership Team and their department managers on continuous process, space labor, automation, and financial best practices. Prior to founding Dotcom, Maria was a CPA at Arthur Andersen and was later the CFO of GoodTimes Home Video where she helped grow the company’s distribution business. When Maria is not in the office, she enjoys traveling around the world and practicing her photography skills.