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    Monday
    Apr212014

    Projections Say Amazon's Same-Day Delivery To Reach 31% of US Consumers

    One thing about Amazon, they are not holding back any punches when it comes to its’ e-retail growth. This is why the company is number one, doing it with power and ease. In recent years, many experts have suggested that Amazon is in the race for more same-day delivery just like every other big retailer, yet it is quietly making its’ moves. However, last year Amazon became quite outspoken about its’ plans involving same-day delivery. Amazon CEO Jeff Bezos discussed at that time, same-day delivery via drones. This was a huge statement and Bezos meant all of it.

    That alone let the world know just how serious Amazon has been about getting its’ products in the hands of its’ consumers fast. Now, a recent projection shows that the retail giant will be able to provide same-day delivery to 31% of its’ customers by 2015. The projection comes from global supply chain and logistics consulting firm MWPVL. President and CEO Marc Wulfraat released the projections. At a Wells Fargo Securities webinar, Marc stated, “The concept of same-day delivery is quickly becoming a competitive requirement rather than a nice-to-have service in key markets such as Los Angeles, San Francisco and New York, where people are willing to pay a premium for this service”.

    He also added that he felt Amazon wants to offer same-day delivery in the top 40 North American cities by population and that would give about half of US consumers access to same-day delivery. Amazon has not commented on the MWPVL projections, but they do make a lot of sense. Amazon’s Local Express same-day delivery program currently operates in 11 cities and metropolitan areas. Those cities include New York, Chicago, Boston, Philadelphia, Las Vegas, Washington, D.C., Phoenix, Seattle, Baltimore, Indianapolis and the metro area of San Bernardino, CA, according to Amazon. These cities give Amazon access to 21% of the US population. Therefore, it appears with simply more growth, the reach will expand to 31%.

    Earlier this week, Bezos released his annual shareholder letter, in which he promised more “innovation” in fast deliveries, including the use of drones. The letter also said Amazon’s plan to expand Sunday deliveries “to a large portion of the US population” this year. He did not mention specifically same-day delivery. Amazon partnered with the US Postal Service in November of last year to launch Sunday delivery in New York City and Los Angeles. With the physical assets of the USPS and its’ need for revenue, this relationship will probably expand.

    Amazon states it operates over 40 US distribution centers. This is what will be one of the major keys for Amazon to successfully offer the fast delivers that its’ after. Same-day couriers like A-1 Express can become a partner with Amazon to make their same-day delivery plans a reality. This San Francisco Courier has a national footprint and can help Amazon expand its’ current Amazon’s Local Express same-day delivery program quickly. There’s nothing like partnering with a company like A-1 Express, which is an expert in same-day delivery. A-1 Express can also be a great option for fast customer order replacements, delivery errors and returns.

    Reference: 4.11.14, Internet Retailer, Thad Reuter, Amazon’s same-day delivery could soon reach 31% of U.S. consumers

    Monday
    Apr142014

    The Tmall Supermarket Grows %400, Delivers Products & Groceries Same-Day

    Online retail has really become a new launching pad for many retailers that are having to make their business go to the next level. It’s a way to get your company from making small amounts of revenue due to low market coverage, to exploding within your industry, all because you have online exposure. It also allows companies to perform a variety of logistical approaches, especially when it’s necessary to work with other retailers and consolidate product orders. This is exactly what is happening for China-based retailer Alibaba, which has created a different approach to generate the kind of sales its’ looking for.

    Internet Retailer recently reported how Alibaba is using e-commerce to deliver to shoppers all the goods they need from a number of sellers, all at one time. Alibaba Group Holdings hosts 70,000 online storefronts within their Tmall Supermarket or chaoshi.tmall.com. The online retail site generated $49 billion in sales in 2013. The Tmall has grown exponentially since its’ 2012 rollout. 2013 was a breakout year, growing at 400% and Alibaba expects 2014 to be the same.

    The sales have definitely come a long way. A Tmall spokesman stated in the article, “the reason is that consumers like to purchase from different grocery stores. We can’t aggregate the orders at that time so that the shipping costs turn out to be too expensive for consumers who place multiple orders”. This was before 2012, when the company had not tried their new approach. Chinese shoppers have really bought into the Tmall Supermarket and the site retailers have as well.

    These storefronts are operated by a variety of retailers, Chinese and foreign. What was discovered was that shoppers would buy their general products from different sellers, however, they did not do the same with their grocery purchases. For example, they would buy their milk from one online storefront, but their rice from another. Alibaba realized that it needed a different online approach to make it work. The retailer decided to create a Tmall Supermarket warehouse, in which all of the storefront sellers would ship their groceries to their location. From there, Alibaba would have the shoppers’ entire order consolidated and delivered to them at one time.

    The warehousing is the key ingredient that makes the Tmall successful. Alibaba has outsourced to logistics management company Guangdong ALOG to handle this aspect of chaoshi.tmall.com. ALOG manages warehouses with 200,000 square meters of space across China. From the warehouses, the Tmall sells roughly 20,000 products, including cosmetics, home furnishings, household cleaning goods, food, beverages, and more. This is a great lesson for any company that may just need a shift in their online retail approach.

    With every online retail business, whether in the US or elsewhere, has to be an effective delivery system. Tmall performs its’ own same-day delivery, charging around $2 per order and free delivery for orders over $15. A same-day courier like A-1 Express is a viable option for online retailers that can’t perform their own deliveries. The Boston courier can also help with fast returns and correct delivery errors.

    Reference: 4.4.14, Fortune Magazine, Dan Mitchell, Next up for disruption: The grocery business

    Wednesday
    Apr092014

    Amazon Revamping Delivery Network, Could Turn To Using Same-Day Courier

    Amazon knows what it takes to do retail, as it continues to beat the competition online. What the retailer feels it needs improvement in is its’ delivery network. Last year’s Christmas shopping season turned out to be a disaster for the retail giant, as their primary partner UPS failed to deliver on-time, not to mention other deliveries. It became clear that the delivery of the product is just as important as the purchase itself. The buying is the shopper’s part. The delivery is Amazon’s. It wants to make its’ delivery network stronger and Amazon is evaluating how this can get done.

    The article covered the grocery and general merchandise delivery options Amazon can choose to implement to get the results it wants. A parcel carrier could work, which could entail the carrier bringing the general merchandise from their sorting location, and combine it with the grocery delivery truck at the Amazon fulfillment center. It would be very challenging to get the delivery done the same-day. Here are some of the quoted changes Amazon stated it will implement to revamp its’ delivery network:

    • UPS, who has been the primary carrier, will be replaced by a network of regional carriers.
    • The top 40 markets will be served by a private fleet being built by Amazon to support an expansion of its online grocery business” (Amazon Fresh). This means there will be a big expansion from the three metro areas currently served by Amazon Fresh.
    • The private fleet network will co-mingle groceries with general merchandise.
    • Orders will be routed through Amazon’s 55 fulfillment centers, with deliveries made the same day, the next day or, at most in two days.

    The main discussion in the Forbes article was whether utilizing a same-day courier could be the key to the optimal delivery revamping that Amazon is looking for. The advantage of using a courier is a courier specializes in same-day delivery. This is their expertise and they are reliable at doing it. A courier service can transport general merchandise and groceries directly from point-to-point within hours. Same-day delivery is the goal for AmazonFresh, which currently is rolled out in a small number of markets.

    The disadvantage of using a courier is primarily the cost. For this type of service, a courier can be expensive. Yet, with a same-day courier like A-1 Express within a market with the right demographics, such as San Francisco, pricing can be lowered and there will be high volume in big cities. It makes sense to use this Los Angeles Courier solely or in conjunction with a private fleet. A courier is also a great source to correct delivery errors, redeliveries and product returns.

    Amazon indeed has high expectations and so does its’ customers. Whether groceries or general merchandise, Amazon has to deliver or its’ competitors will. Wal-Mart, for example, has launched a same-day grocery service of its’ own. “WalMarttoGo” not only offers same-day delivery of groceries ordered online, but shoppers can also pick up their order at a local Wal-Mart store. This isn’t an option that Amazon has for its’ shoppers. Amazon’s delivery network has to be effective to compete long-term.

    Reference: 3.19.14, Forbes Magazine, Steve Banker, Amazon Revamps Its U.S. Delivery Network

    Monday
    Mar242014

    Postal Service Seeking More Profits, Deliver Packages On Sundays And Same-Day Delivery

    It is a great time for the Postal Service, as it has begun to see some daylight after the years of losses. The mailing giant only suffered $5 billion in losses last year, which is a big difference from almost $16 billion in 2012. This is due to some major restructuring with the company’s business strategy and it’s working. The Postal Service is now pursuing to shut down Saturday mail deliveries, which will give it even more flexibility to implement other services that generate more revenue.

    The Federal Times reported that the Postal Service is now seeking after delivering packages on Sundays. This would mean it will provide package deliveries every day of the week. It is something that the Postal Service has found is being well-received by customers so far, as it currently offers package deliveries in a number of US cities already. Those cities include New York City, Los Angeles, some areas in Texas, and some Mid-Atlantic areas.

    The company believes the shift to Sunday service will be pay off, as Postmaster General Patrick Donahoe made the announcement of the company changes at the annual National Postal Forum. He stated at the forum, “That is why we are moving toward the seven day model. It has caught on like wildfire in New York. We have a whole group of customers there”. When the demands and needs of the customer changes, businesses must evaluate their services and change along with them. The Postal Service is making the right changes before the company was going to clearly hit rock bottom.

    At the forum, Donahoe also mentioned about the new venture of same-day delivery, which the Postal Service is offering in New York City, which is also known as Metro Post. It has been successful there as well. Same-day delivery is a service that is becoming more popular involving meeting the delivery needs of online customers. Online retail has consistently grown at 16% annually in recent years, as more customers shop and conduct business via mobile devices. Now, there is a huge market for customers that desire their online purchases to arrive at their front door the same-day.

    It’s a service source that the Postal Service can have an advantage in long-term. E-retailers like Amazon, eBay, and Wal-Mart have implemented same-day delivery in a number of US cities. However, unlike the Postal Service, none of them have a vast and robust vehicle fleet that can cover the entire country. The other viable option for the e-retailers is to invest in their own delivery fleet or partner with a same-day courier like A-1 Express to perform the deliveries for them. The Charlotte Courier can help online companies with same-day delivery nationwide.

    All of these e-retailers show no signs of slowing down, as they continue to make major investments to develop their own effective version of same-day delivery. Amazon and Wal-Mart even provide same-day grocery delivery services in Seattle, Los Angeles, Denver, and more. The Postal Service is currently partnering with Amazon to perform their same-day deliveries in New York and this relationship will probably grow.

    Reference: 3.18.14, www.federaltimes.com, Andy Medici, Postal Service pushing package delivery into Sundays

    Tuesday
    Mar112014

    Staples Increases Investment Toward Online, Same-Day Delivery Could Be Next

    With e-commerce continuing to show its’ muscles in the business world, it is no wonder more and more companies are shifting their focus toward it. It use to be unthinkable to shut down your brick-and-mortar locations to make a greater investment into the web, until now. This is exactly what long-time office supply giant Staples is taking strides in doing, in order to keep up with the big changes overall that are occurring for companies to grow right now.

    Staples, in fact, has plans to cut costs by $500 million and has a goal to close up to 225 North American locations by 2015 reported the Internet Retailer last week. This is about 12% of its’ 1,800 stores across the US, which as a whole, is a big move by Staples. The retailer clearly is serious about making the necessary changes to compete. Their number of products offered went up fivefold, however, sales only increases slightly by 1.4% in 2013. This equated to a total sales decline of 11%.

    The interesting figures that could have sparked the shift by Staples is in spite of the low overall sales growth, Staples.com actually increased its’ sales by 10.4%. CEO Ron Sargent agrees that their retail sales are shifting toward online and that’s the direction the company is going in. He stated, “A year ago, we announced a plan to fundamentally reinvent our company. With nearly half of our sales generated online today, we’re meeting the changing needs of business customers and taking aggressive action to reduce costs and improve efficiency.”

    There were some definite changes indeed that Staples implemented last year that showed its’ aggression to meet its’ online goals. The company ended the 2013 with 400,000 more online products available on their site then a year before. Staples also eliminated over one million square feet in space through various ways, such as store downsizing and relocating into more efficient space. Kiosks have been installed in stores to meet customer needs as well.

    Ultimately, Staples wants sales to increase and it is making the necessary changes toward online business to make this a reality. E-commerce is something many other heavy-hitters in the retail world have made investments in to gear their business and services to what shoppers are attracted to. One of those measures is convenience, which companies like Google, Amazon, eBay, Target, and others have implemented same-day delivery, enabling them to deliver online orders to a shopper’s front door. Wal-Mart not only offers same-day delivery, but also store pick-up services for online orders. When a customer arrives, their order is already pulled and ready for them to easily pick up.

    This can be another innovative change for Staples to be able to offer its’ online customers. The office company could offer same-day delivery as a shipping option at checkout and same-day courier like A-1 Express can perform their online deliveries. The Seattle Courier meets the demands that comes along with online retail, and shoppers can even be recommended by Staples to pick their online orders up for them.

    Reference: Internet Retailer, Paul Demery, Staples shifts investment to the web