Amazon has thrown down the gauntlet in the supply chain industry by introducing a new feature for its Prime members: free, same-day delivery. The online e-commerce juggernaut is challenging competitors to step up or go home. The question is, however, do the majority of consumers really care? At this point, Amazon’s testing the service in a small number of cities, looking for concrete evidence the concept is viable.
Is Anyone Watching?
It should be obvious that competitors will be watching the results as the move will signal the future of marketing in a variety of segments, especially those in direct competition for Amazon consumers. Offering same-day delivery will test Amazon’s infrastructure and, at the same time, measure consumer demand for the service. It also suggests that competitors who are cognizant of current and emerging trends will closely study the move to determine what it means for their marketing efforts.
Because the concept has been openly discussed in recent months, other marketing experts are not surprised by Amazon’s move. The company’s Prime members have enjoyed two-day delivery in most areas for some time. However, the move to same-day delivery ups the ante and may force competitors to re-evaluate their operations.Are Others Emulating Amazon?
It should stand to reason that others, seeing the handwriting on Amazon’s wall, are taking steps to preempt any move by Amazon to further erode their market share. Key players within the field are, indeed, looking at ways to counter any threat Amazon may present. For example, at least 400 merchants are testing same-day delivery services provided by Uber. The revolutionary Uber Spring + platform offers retailers a new way to provide a service similar to AmazonFresh and other delivery schemes.
“Experimenting and finding new, creative ways for the Uber app to provide even greater value to our riders and driver partners is a way of life at Uber,” said a spokesperson from the company. “We have been piloting UberRUSH with multiple retailors for the last year.”
While Uber’s services are likely to challenge the dominance of Amazon, the company should be expecting other organizations will enter the fray if consumer demand indicates the services are actually needed.What are the Challenges Facing Amazon, Uber, and Others?
The biggest single challenge facing Amazon is developing an infrastructure that will have the capacity to deliver on its same-day delivery promise. Resources must be in place, and the expense of developing and maintaining those resources may not, in the long run, be financially viable. Uber, in this instance, may be better able to ramp up services when demand requires additional resources. However, meeting consumer demand during peak periods will test any service of this type, as demonstrated during recent Christmas periods when shippers’ delivery promises were not kept.How Will Consumers Be Impacted?
That is arguably the single most important question. If consumers see value in the service, it is likely to see their reliance on marketing giants like Amazon increase. However, the service isn’t free, so consumers will likely see increasing costs necessary to defray the delivery expenses at some point. Amazon and other leading retailers may be able to absorb the costs involved for a short period of time, but not in the long run.
Evolving consumer demands have the potential to propel same-day delivery services to the forefront of marketing trends, but companies delving into the untested waters may not experience the results they anticipate. Only experience will determine if same-day delivery is here to stay.
Information sourced from Tech Crunch