Tech Viewpoint: Three ways next-day delivery is changing retail

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Tech Viewpoint: Three ways next-day delivery is changing retail

By Dan Berthiaume - 05/17/2019
Recent next-day delivery efforts by Amazon and Walmart are affecting the entire retail industry.

Shortly after Amazon announced it would work toward shifting standard Prime delivery time from two days to one day, Walmart began piloting free next-day shipping for more than 200,000 items. When two of the industry’s biggest titans both make the same move, it constitutes a paradigm shift. Next-day delivery is already starting to reshape retail in the following three ways:

Fast is the new black
No matter who you are or what you sell, your customers probably shop at Amazon and Walmart. Once they start routinely getting products from those two retailers shipped to them the day after making a purchase, they will come to expect the same type of delivery responsiveness from all the online retailers they frequent.

This means fast delivery will become table stakes for participating in online or omnichannel retail. Larger retailers will need to leverage their infrastructure and scale of operations to develop robust in-house next-day shipping capabilities. Smaller retailers will have to turn to third-party delivery platforms, crowdsourcing, or other outside resources to offer next-day delivery as frequently as possible, and certainly nothing past a two-day fulfillment window.

Brick-and-mortar loses an edge
Next-day delivery will spur the diminishment of one of brick-and-mortar retail’s few remaining competitive edges: immediacy of product. Click-and-collect, pickup lockers, and other omnichannel services are already encroaching upon brick-and-mortar’s promise of being able to take home an item as soon as you purchase it. And widespread availability of home delivery within 24 hours will dull the shine of traveling to and navigating a physical store even further.

Brick-and-mortar retailers also need to realize Amazon and Walmart will not be stopping at a next-day delivery timeline. Both have made clear they intend to keep reducing how long a customer has to wait to receive their online order.

Therefore, physical stores need to up their game in areas like hands-on customer service and in-store entertainment to maintain competitiveness in this rapidly emerging world of quick e-commerce fulfillment.

The unique and the dead
Realistically, no retailer will ever have the infrastructure or monetary resources to compete with Amazon and Walmart on one-day delivery at a truly equal level. Those two behemoths can also meet or beat virtually any other retailer on assortment and price. Quick delivery will become an assumed retail service, but not a means of competitive differentiation.

This means retailers will have to find other, unique customer-facing features beyond providing one-day delivery as frequently as possible. As mentioned above, brick-and-mortar stores can provide certain tactile customer service offerings. In addition, features such as personalized discounts, gamified promotions, and social media integrations can help retailers stand out in any channel.