11/06/2019
Will one-day Prime shipping destroy the retail as we know it?
Once the one-day Prime shipping was introduced for the first time, it was a handy new option that many saw as a little more than the extravagance for the chosen few who lived in the areas near huge Amazon storage and distribution facilities. It didn’t raise the alarm as people were thinking it would be something without a clear perspective to become a globally available service that could disrupt the market.
Now, things have changed!
Ever since the Amazon has announced that they are about to invest $800 million in this program in the US, it caused a slight panic attack to every retailer operating there! All of a sudden it became a move that makes the competition do the impossible in order to stay competitive.
The most common fear was that they will have to invest huge amounts of money they don’t actually have in order to match the service. Since the customers are inclined to shop where they see it the most convenient, and that the shipping time is one of the key factors that determine the success of online sales, this move at the first glance seemed to be the killer of competition.
Still, this is pretty far from the truth. In fact, the most of that huge investment is focused on expanding the storage capacities and that is something that a lot of big retailers already have, either as dedicated storage or the storage within their physical store's network.
This implies that there will be no need to invest huge amounts of money to match what Amazon is trying to offer.
The solution
The real solution to this problem is far simpler than it seems at the first look. The existing storage capacities are more than enough for most retailers to remain competitive with the Amazon. They will, however, have to pay close attention to their stock and to introduce more predictive and more sophisticated stock distribution systems, as well as more prompt and dynamic shipping options.
This is not something that is unavailable on the market, and with a few proper investments into tools that could help them manage these issues, the problem will be solved.
The entire ordeal should, in fact, have a positive impact on the eCommerce as a whole, as the increased quality of service guarantees increased sales. All the retailers that answer this call in the right way could only expect to benefit from it all!