Discount Retailers Redefine Delivery
Discount retailers work to improve order fulfillment, speed up delivery
July 13, 2015 | Retail & Ecommerce
Amazon Prime’s growing hegemony has put the heat on retailers of all stripes, but it’s in the discount store arena where delivery has become a true arms race, according to a new eMarketer report, “Discount Retailers and Digital Commerce: Trends and Benchmarks.”
Fine-tuning supply chains has been the first step. Target already has seven ecommerce fulfillment centers and will open two more in 2015, while also increasing ship-from-store efforts to improve delivery speed. Wal-Mart plans to double its online inventory and open four new distribution centers in Q2 2015.
In February 2015, Target lowered its free shipping threshold from $50 to $25, and in May 2015, Wal-Mart said it would begin testing a three-day delivery, unlimited shipping program with an annual $50 membership fee, undercutting Amazon Prime by nearly by half.
Same-day delivery has been offered in fits and starts by discounters through limited pilots with eBay and Google (Target and Costco are currently accessible for same-day delivery in Manhattan, San Francisco and West Lost Angeles via Google Express, for example), and some see that as just the beginning.
Steve Barr, US retail and consumer sector leader at PricewaterhouseCoopers, envisions it going even further. “We are seeing a rapid adoption of concierge-type services, including shopping and delivery services. The next movement is in the sharing economy—engaging folks to go pick up or to deliver, and maybe even to shop on my behalf.”
For now, that specialized level of service is seeing more traction with grocery and food delivery through startups like Instacart and Postmates, but could ultimately have implications for other sectors.
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