ENTRIES TAGGED "e-commerce strategy"

Commerce Weekly: Same-day delivery war heats up

The same-day delivery battle, NFC in vending machines, and Google as information central for holiday shoppers.

Here are a few stories that caught my attention in the commerce space this week.

The high price of instant gratification

The Wall Street Journal’s Greg Bensinger took a look this week at the e-commerce same-day delivery trend, a service eBay, Wal-Mart and Google have been experimenting with in order to better compete with Amazon, which has offered same-day service in select locations since 2009.

The obvious benefit for e-commerce retailers is being able to improve the customer experience — providing the convenience of online shopping with the instant gratification of brick-and-mortar shopping. The biggest obstacle is cost. EBay, for example, has hired couriers, paying $12.50 per hour and 55 cents per mile, Bensinger reports, but only charges $5 to deliver a minimum $25 order. Industry analyst Kerry Rice told Bensinger, “Retailers are clearly subsidizing this service to improve the customer experience. Amazon created this monster and everyone has had to jump on board to compete.”

Amazon operating at a loss to draw consumers into its ecosystem is pretty par for its business model, and its deep pockets mean companies are going to have to get creative to successfully compete. Wal-Mart is perhaps in the best position not only to compete with Amazon on this front, but perhaps even overtake and lead the same-day delivery field. Walmart.com chief executive Joel Anderson highlighted for Bensinger Wal-Mart’s advantage: “We have 4,000 Wal-Mart stores and local goods within five miles of most customers.” Each store basically serves as an online distribution center, a scale that Amazon could be challenged to meet, even taking into account its aggressive distribution center expansion plans.

In related news, Google reportedly shelled out more than $17 million to buy Canadian locker storage startup BufferBox this week. As many outlets reported, Google may be positioning itself to compete against Amazon’s Locker delivery service, which allows customers to have goods delivered to secure pick-up stations rather than home addresses.

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