Amazon is testing “free 2-day delivery” using its own shipping service in Los Angeles, signaling even further displacement of online retail by shifting more control of the shopping experience and e-commerce channel to Amazon, which already owns 43% share of the market.
What many do not realize is that this is not a new initiative. Amazon started developing this latest enhancement in shipping capabilities two years ago in India with the goal of lowering costs and relieving warehouse backups. Even more importantly, the move not only gives Amazon greater control over more of the touch points affecting customer experience, but also provides wider options to merchants using the platform to sell products locally.
In the near future, it will not just be mail carriers who will feel the pressure to deliver; retailers will continue to lose sales to Amazon, which has more power to drive lower costs and convenience for customers. In the meantime, while Amazon makes the move to grow its logistics and operations capability, other carriers like UPS and Fedex have already expanded their own local and regional capabilities by partnering with convenience stores and other locations that hold packages and allow for safe pickup – offering more flexibility to customers who may not want a stack of boxes sitting on their porch.
What all of this means for shoppers is that prices will continue to fall for basic necessities found on Amazon, while specialty stores like The Home Depot will maintain themselves as destinations for those looking for specific items. Meanwhile, retailers like Walmart, which have the size and scale to compete on price, will continue to thrive while smaller stores may be forced to find an e-commerce niche to continue their relationship with customers.
Contributed By:Dennis Wakabayashi, Integer Dallas
Image Source: Amazon Press Kit
