Without a doubt, Amazon
(NASDAQ:AMZN) has had a considerable impact on the retail world, and can be cited as the reason that some of the industry giants have suffered major falls lately. Amazon’s ability to allow customers to purchase new and used products off the Internet and have them delivered reliably to their homes has turned stores like Best Buy
(NYSE:BBY) and Office Depot
(NYSE:ODP) into showrooms for Amazon purchase. In the past, these stores tried to win back consumers with competitive prices, but with eBay’s
(NASDAQ:EBAY) new “eBay Now” project, America’s most popular brick-and-mortar stores are getting the chance to leap ahead of Amazon on service.
The eBay Now project launched in August, partnering with stores such as Macy's
(NYSE:TGT), and Best Buy through an iPhone
(NASDAQ:AAPL) app. When a customer selects an item from the app, an eBay “valet” is instructed to deliver said item to the customer for a $5 fee, though the first three deliveries are free. First-person reports of the service from the Los Angeles Times
claim that the items can be delivered within 30 minutes of purchase, to any location, allowing for an extraordinary level of convenience. The service, which started in San Francisco, has recently been expanded to New York, and is being planned for availability throughout Southern California.
Offering same-day delivery could be a major move for retailers, because at the moment it’s a position where Amazon has limitations. While Amazon Prime customers are privileged to unlimited, free two-day shipping for a once-a-year $79 fee, the company simply doesn’t have the presence to enact same-day delivery on a country-wide scale. Amazon has been offering same-day delivery in select markets since 2009, but in the same Los Angeles Times
article, Amazon’s Chief Financial Officer Tom Szkutak is quoted as saying, “We don't really see a way to do same-day delivery on a broad scale economically.” To reduce shipping times, Amazon has been rapidly building more shipping centers, but it might be some time before nationwide same-day shipping becomes feasible.
Luckily, Amazon’s inability to quickly enact same-day shipping has offered a great opportunity for those retail chains that are worried about their future to get ahead. In the same vein as eBay’s projects
(NASDAQ:GOOG) is currently testing same-day delivery in California, and Wal-Mart
(NYSE:WMT) has begun extending its reach through a partnership with UPS
(NYSE:UPS). Small businesses are also trying to get into the action, as the United States Postal Service is beginning an experiment in San Francisco with 10 yet-to-be-announced retailers. Start-ups, such as the San Francisco-based Postmates, are also springing up with the objective of being middlemen between retailers and their shoppers.
In the end, expanding their reach into same-day shipping seems to be a great way for retailers to match Amazon on service. Amazon seems to have its hands full competing with the tech giants in the tablet world, and Netflix
(NASDAQ:NFLX) when it comes to streaming services, so it may be a while before it resolves to offer same-day shipping in more places. As such, retailers should be aiming to set up their shipping services while they still have a chance.
No positions in stocks mentioned.