Amazon started as online book store and has grown to be the worlds largest online retailer.
How can retailers and brands compete with Amazon Prime Same-Day?
Amazon are constantly expanding both the selection of products available and the geographical areas covered Prime Same-Day deliveries. Knowing this is shouldn’t have been a surprise this Sunday morning to see that Amazon have now added a filter promoting Prime Same-Day in my area on their mobile app. This is despite Prime Now not officially being available at my home address.
Amazon Prime Same-Day
Prime Same-Day isn’t available for every product to my location, but there is an amazing selection of products that are. It’s made possible by Amazon’s continued ongoing investment in Amazon Logistics and by their relentless desire to put products ever closer to the end consumer.
Located in central Berkshire, Amazon have depots in Theale just outside Reading, Swindon one stop up the M4 and Southampton south on the A4 from where I live. Amazon almost certainly have more depots in the area that I’m not aware of. These don’t appear to be simply delivery depots but also hold stock of some of Amazon’s most popular products but in addition, Amazon now have 16 fulfilment centres in the UK which as well as shipping Amazon retail products also handle FBA for third party retailers. My nearest two Amazon fulfilment centres are Hemel Hempstead and Milton Keynes, either of which could deliver products into the Theale depot on the same day as it’s roughly a 90 minute drive.
Of course the time of day that you order will have a deciding factor on whether a same day delivery is possible or not combined with your location and which Amazon warehouse the product you wish to buy is located. What is significant is the filter promoting products available for Prime Same-Day with products ordered in the morning available for delivery between 6pm and 10pm the same evening.
Should retailers and brands compete or partner with Amazon?
The concern for retailers, brands and other marketplaces will be how to compete with Amazon’s delivery proposition.
It may be tempting to believe that having a wider selection of your brands products available in your warehouse with next-day delivery is sufficient. However, there is a real danger that some customers who start their product research on Amazon will simply bypass your brand in favour of an alternative if it can be delivered rapidly. This is especially the case considering that Prime subscribers will not only be able to access Prime Same-Day delivery but it will also be a free delivery with their subscription.
There is an argument that many products aren’t urgent purchases so brands selling clothing for instance are less likely to see demand for same day-delivery than those selling fast-moving consumer goods. However brands and retailers still face the decision of whether to offer economy delivery for free and charge for expedited delivery or if their customers will demand next-day delivery and expect it for free.
Partnering with Amazon
The obvious solution may be to become an Amazon supplier or marketplace seller and increasingly this is seen as the easy option but often still considered as undesirable. Still many retailer and brands who do use marketplace limit the selection offered to end of line, out of season and gently distressed products rather than their full in season ranges. It would take a change in many retailer’s and brand’s channel strategy to put their entire current lines on marketplaces.
Competing with Amazon
The alternative to partnering with marketplaces is to partner with carriers who can offer a similar service. Whilst most retailers and brands don’t have the ability to ship same-day nationwide except at prohibitive cost, many do have a substantial number of high street locations. Assuming a live stock control inventory solution with an up to the minute view of local stock, partnering with a same day collection and local delivery service such as On the dot could be the solution to compete with Amazon without throwing in the towel and becoming a marketplace partner.