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[15 comments]

Amazon expanding Sunday deliveries

February 19, 2014

Amazon.com's same-day delivery service may not be the greatest challenge to its brick and mortar competitors. Stores perhaps should be more concerned about the online giant's ability to deliver packages seven days a week through its partnership with the U.S. Postal Service (USPS).

Back in November, Amazon announced it would begin the rollout of its Sunday service in New York and Los Angeles, with other markets including Dallas, Houston, New Orleans, Phoenix to come this year. Now comes a report by The State Journal-Register that Amazon is going to start offering Sunday deliveries in southern Illinois beginning on March 16.

"If Amazon gives us a package early in the morning, we'll delivery it that day," David Martin, district manager for the USPS Gateway District in St. Louis, which covers southern Illinois as well as central and northeast Missouri, told The State Journal-Register. "Seven-day delivery is now a reality for us, and that's our future."

In a Nov. 2013 RetailWire poll, 84 percent of respondents said consumers would find Sunday delivery a somewhat or very persuasive offer to order online rather than going to a store to buy needed items.

FINANCIALS:     [NASDAQ:AMZN] [ ]

Discussion Questions:

What poses the biggest threat to brick and mortar competitors of Amazon.com, its ability to deliver same-day or its expansion to seven-day delivery? Is Amazon's accelerated rollout of the service indication that it's working well or even better than expected?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

What poses the biggest threat to brick and mortar competitors of Amazon.com, its ability to deliver same-day or its expansion to seven-day delivery?

Comments:

This isn't an either/or question. Both same-day and Sunday delivery are part of Amazon's growing brand promise. Surely this is a threat to any e-commerce site that has linked with a carrier like UPS or FedEx, especially if Amazon locks up an exclusive deal with the USPS.

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Dick Seesel, Principal, Retailing In Focus LLC

Amazon continually finds ways to expand its services. Both of these coupled together provide additional ways to service more customers, more quickly. It isn't so much is one more of a threat than the other, it is how do all of these things together put more and more pressure on traditional retail.

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Brian Numainville, Principal, The Retail Feedback Group

Simply put, the biggest threat to brick and mortar based retailers is not Amazon's ability to execute on same-day or seven-day delivery (each of which is significant), but the cultural force that demands constant innovations that push the envelope on what's possible.

Rather than remaining satisfied with the status quo, Amazon continues to redefine it so others have to chase it while it adds capabilities that expands the choice set and perceived value by consumers. Amazon understands that since one can purchase nearly any item at a store or online, then retailers have to differentiate on dimensions other than the product per se and therefore elevate the total experience from search to delivery and consumption and after-sales service.

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Mohamed Amer, Vice President, Global Integrated Retail Unit, SAP

Amazon is a good example of a company continuing to innovate and offer services that consumers will like. At premise is the biggest threat because once consumers see a company offer a service they like, that becomes the new bar for service for other retailers. Consumers must be responding well to the increased speed of delivery and Amazon is continuing to push the boundaries. Other retailers will need to either respond in kind or offer some other service that their consumers will value.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

Amazon is taking away the proximity advantage long enjoyed by bricks and mortar retailers, which translates into convenience for the consumer. Amazon continues to experiment with delivery options designed to minimize final mile issues as well as enhance convenience. At any point in time, Amazon may be testing 15 different delivery options.

Amazon is for real. Bricks and mortar retailers need to respond strategically sooner rather than later.

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

It is not the delivery that is Amazon's competitive edge. It is its flexibility and focus along with its commitment to customer service.

When will brick and mortar retailers realize you cannot beat Amazon if you try and play their game? You need to start playing your own game and playing it better. That game is quality service by real people.

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Mel Kleiman, President, Humetrics

Amazon's competitive out of the box thinking is making the competition better in order to try to stay up with what the market is offering. So give Amazon some credit for forcing the issue.
I find it interesting that they teamed up with the USPS, a business on the verge of collapse, to bring the seven day and Sunday delivery to the marketplace. This could be the real difference maker for the USPS.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

"The Everything Store!" That's the biggest threat of Amazon to the entire world of retailing - they WILL sell "everything," by and by. Operationally, the long tail is KILLING bricks retailers, because if they bring it into the store - a massive amount of it is already there - they will further suppress sales of the big head. See "The Misguided Bobbing of the Long Tail." The DOMINANT problem for bricks retailers has been for a long time, and will remain, "How to Sell the Few, Among the Many?"

I've written something like 40 "Views" on one aspect or another of this over the past six years. And yes, I still have a lot more to say about it - partially as a consequence of ongoing research on exactly this issue. So, where's the rest of the retail world? Some pushing ahead, and others are dying slow deaths. A&P and Sears won't be the last winners to bite the big one. (So I'm still a little early on the obits - but I live in the future: come on in, the water's fine! ;-)

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Herb Sorensen, Ph.D., Scientific Advisor TNS Global Retail & Shopper, Shopper Scientist LLC

Amazon continually invests in programs that work and that will allow customers to feel like they are getting the best customer experience possible. As brick and mortar retailers continue to battle against Amazon's cheap prices and customer service with in store demos, personalized capabilities, etc., Amazon is no doubt rolling out this service to stay one step ahead of competition and lock in customers.

I have no doubt that this is a well received program, and anything that can get customers to remain loyal to Amazon will have a positive impact on sales and future revenue streams.

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Jesse Karp, Omnichannel Consulting Manager & Loyalty Practice Lead, Cognizant Business Consulting

This is a very real threat to brick and mortar competitors. However, there are certain things customers must have. Whether it be Amazon or a brick and mortar business providing them, they are a definite plus to have.

1. prompt friendly service.
2. competitive prices.
3. hassle free return policy.
4. a solid guarantee.

Do these and you can compete with the rest of them.

Time will tell how well Amzazon will do with this approach.

Tom Borg, Business Expert, Tom Borg Consulting, LLC

Amazon has a chance to grow/take away sales from brick/mortar retail by taking both of those steps, so it's not really surprising they are doing it. Convenience and a shopping experience tailored to "your schedule" seems like an attractive option to traditional shopping. Even if take-up/adoption is initially slow, you can see how this service could really take off.

Brick/mortar stores seem to be moving to create a lot of messaging around a localized buying experience (grocery banner Jewel in the Chicago area seems to be stressing this in its advertising). Amazon could find itself a bit like a Walmart amid more localized/personal retail options that consumers seem to be favoring more and more. In a zero sum game though, Amazon probably has the upper hand in this contest for shopper dollars.

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Gib Bassett, Global Program Director for Consumer Goods, Teradata Corp.

I think same-day trumps Sunday because presumably Sunday is one of the "same" days.

Amazon doesn't wait to see if things are working, it keeps hammering on them until they work. And that single-minded obsession with goals is where its real advantage lives.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

Same-day delivery of product that is sensitive to heat, warmth, and standard handling will slow the return on this investment by Amazon. It will also more than likely increase the number and range of unhappy customers.

Brick & mortar retailers are rapidly expanding the prepared foods to include a wider range of meals for individuals and families. Additionally in many stores food and supplies for whole events can be purchased and picked up at a very reasonable cost. Grocers and big boxes should be wary of the Amazons in this economy. But Amazon needs to know that at some point a much bigger retailer with the money to buy or build an Amazon competitor will do just that if the investment can get a return or bust them for sure.

'gjarnoldjr'

Same-day delivery is clearly the largest threat to traditional retailers. Amazon's extensive inventories combined with low prices have always been a concern, but now when you add this delivery option, it changes.

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Kai Clarke, President, Kowa Optimed, Inc.

Amazon continues to stay ahead of the curve. "Traditional" Sunday's are no more as we are a global economy, 24/7 shopping, erosion of unions, 24/7 social dialogue and the need for instant at-your-fingertip gratification.

Creative use of drones, it's coming partnership with USPS - I wouldn't bet against some sort of ownership with part of USPS at a future date.

Amazon keeps the competition guessing what the next move is. Smart competition stays ahead of the curve as well.

Alan Cooper, Contract Trainer/Training Consultant, Independent/Freelance

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