Retailers Offer Expedited Delivery to Compete with Amazon

Other retailers are attempting to challenge Amazon’s commanding market share by offering their own version of Amazon Prime and/or same day delivery. A number of retailers utilize ShopRunner, a cooperative shipping service. Like Prime, users pay an annual membership fee for free two-day shipping, free returns and no minimum order size.

As for same-day delivery, a handful of retailers are offering the service, despite its challenges. Walmart, for example, has a pickup grocery concept in which customers pickup online orders at drive-through kiosks and free next day delivery on approximately 200,000 products. FedEx launched Sunday residential delivery across the U.S. in 2019 as well, further fueling the fast delivery fire for retailers.

Employees at Retail Stores are Fulfilling Online Orders: A Big Logistical Challenge

Walmart is relying on many of its stores as distribution centers for online orders. Target is also fulfilling many of its online orders through its stores. This requires retraining employees to be stockers, packers, shippers and product specialists. Supermarkets are doing the same thing: employees are being retained to first pick items ordered online off the shelves, and then pack and hold them in large, special areas within the stores for delivery or drive-through pickup. The problem with this strategy is that these buildings were designed to be retail stores, not warehouses. It is unlikely that this fulfilment of online orders through existing stores could ever be as cost-effective or efficient as fulfillment through warehouses that are specifically designed for this purpose. Growing numbers of Amazon competitors are outsourcing logistical needs. Businesses including Shopify, Wix.com and Squarespace offer payment processing while ShipBob and Quiet Logistics fulfill orders through their warehouses. Robotics manufacturers such as 6 River Systems and GreyOrgange Pte. offer equipment similar to Amazon’s automated internal package systems.

Restoration Hardware Holdings, Inc.’s Lands’ End and Barnes and Noble offer a similar fast delivery program. Luxury fashion site Net-a-Porter offers Premier, a same-day delivery service for customers in New York and select locations in New Jersey. eBay subsidiary Shutl is a package-delivery system based in the UK that uses vans and bikes to deliver purchases. U.S. grocery store chain Kroger has been working with electric vehicle startup Nuro, Inc. to develop driverless delivery vehicles.

Meanwhile, Walmart acquired Jet.com, an ecommerce retailer of general merchandise for $3.3 billion in 2016. Walmart also purchased men’s clothing company Bonobos in 2017 for $310 million, largely due to the clothier’s focus on online sales. In addition, the giant retailer spent $166 million on ecommerce startups such as ModCloth and Shoebuy.com. Walmart customers who shop online and in stores generally spend twice as much as those who shop in-store only.

Fulfillment company Darkstore, Inc. offers an app called FastAF that lists a wide variety of goods delivered in two hours or less. The platform has more than 1,200 products available from about 170 brands. Darkstore uses DoorDash to make the deliveries. As of late 2021, service was available in Los Angeles, New York City and San Francisco.

In China, ecommerce leaders such as JD.com and Yihaodian have been aggressively expanding their delivery networks and options, including same-day delivery in major cities.

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