Over the last two decades the retail world has changed dramatically. Just a quick trip to your local mall and you’ll see that the once mighty box stores of JC Penny, Sears, and Gap are now endangered species. It’s clear, people prefer to do their shopping with a mouse and keyboard in the comfort of their own home.
In 2018 eCommerce continued its march towards retail dominance with record setting sales and growth throughout the year. If you’re a major brand lacking online presence, you’re pretty much doomed. Additionally, to compete with major online retailers like WalMart and Amazon you have to differentiate yourself significantly.
Research shows shipping helps drive purchasing habits. In today’s world of Amazon Prime shipping consumers expect their order to arrive fast and FREE. A recent study put out by Alix Partners reinforces this claim. Furthermore, this has become known, for good reason, as the Amazon Effect.
The report also shows that consumers expected time to delivery for free shipping has dropped from 5.5 days in 2012 to 4.5 in recent years. And, this number is expected to continue to drop. Because of this, online retailers like Amazon are investing major money to improve their delivery networks. No longer is it acceptable to ship from a single location in today’s market. To stay competitive online retailers must manage multiple warehouses and fulfillment channels.
But this leaves an interesting opportunity for traditional retailers struggling in the world of e-commerce. By utilizing existing brick-and-mortar stores and an omni-channel fulfillment method, they can now have a competitive edge up on their online competition. Offering services like drop-shipping locally, in store pickup, and utilization of their existing supply chain means they can provide their product to consumers fast! Often faster than Amazon in areas where Amazon has a decreased presence.
Research has also shown that we are impatient by nature and look for the cheapest and most convenient way to obtain the goods and services we need. Therefore, it is important that retailers stay innovative and competitive within the market. As Amazon continues to build out their delivery network shipping times will continue to drop. However, if traditional retailers can continue to push in store pickup via incentives and discounts, they can stay competitive.
The Amazon Effect is here to stay, and Amazon will continue to impact the world of e-commerce and retail. As a result, traditional retailers need to stay competitive in this ever-evolving market. Hence, use of emerging logistics models like omni-channel fulfillment and the ability to rapidly move product in their supply chain will help their market advantage. Use of software and new technology will help enable this competitive advantage. In conclusion, today’s world of commerce is fierce, finding and maintaining an advantage is critical to survival.
- Jim Blaeser, Marc Iampieri and Roshan Varma. “Top trend in shipping? More consumers want fast and free.” March 2018. eMarketing.
- Marketing Charts. “Consumers Are Getting More Impatient About Delivery Times.” 15 March 2018. Marketing Charts.
- Wertz, Jia. “5 Trends That Will Redefine Retail In 2019.” 28 November 2018. Forbes.com.