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    Wednesday
    Sep072016

    Amazon Has Record 28% 2nd Quarter Growth, Same-Day Delivery Helps

    Some revenue growth happens for any company that is good, unless you are competing against Amazon. Your results are going to have to be more than mediocre in comparison to what the e-retailer is doing, putting others in a compelling position to make innovative adjusts like Same-Day Delivery to their e-commerce.

    The recent numbers show that Amazon is outpacing many retailers, as sales increased 28.1% in the second quarter this year in the US and 30.1% internationally. Amazon's Web Services cloud computing unit also went up by 58.2% increase, resulting in an overall revenue growth to 31%. More and more shoppers have become comfortable with online shopping, as well as the convenience demand that it meets. This demand is driving Amazon and other retailers to get online items into their customers' hands right where they are. Brick-and-mortar business still remains ahead e-commerce; however, online retail is expected to reach $500 billion by 2018. This equates to Amazon's aggressive ingenuity and it is creating results.

    In fact, the article by Internet Retailer mentioned the second quarter numbers were a record net income for Amazon. Its' met income reached $857 million, which is almost ten times the net income of only $92 million in the second quarter the year prior. The positive quarter makes it the fifth consecutive profitable term that Amazon has had. In the past, Amazon often reported quarterly losses due to heavy investments into new fulfillment centers, new device development, licensing movies and TV shows for its Prime Video service. Yet, there is an overturning of investment into steady revenue.

    Here are some additional stats from Amazon record-setting second quarter:

    • North American net sales of $17.674 billion, up 28.1% from $13.796 billion in the same period a year ago.
    • International net sales of $9.844 billion, an increase of 30.1% from $7.565 billion last year.
    • North America sales of books, music and other media of $2.928 billion, an increase of 11.8% over $2.620 billion in Q2 2015. North America sales of electronics and general merchandise increased 31.6% to $14.459 billion from $10.987 billion.
    • Net income of $857 million, a sharp increase from $92 million a year earlier.

    From Amazon, it appears we haven't seen nothing yet. “We're opening 18 fulfillment centers this quarter,” said Brian T. Olsavsky, Amazon's senior vice president and chief financial officer about future implementations, according to a transcript via SeekingAlpha. “To put that in perspective, we launched six in Q3 of last year. This will bring us up to 21 net FCs for the year by the end of Q3 and that compares with 10 fulfillment centers for the first three quarters of last year on a net basis." Olsavsky went on to say, “So, why are we expanding so much? If you remember back to Q4 and the capacity constraints we had in Q4, primarily due to really strong FBA growth, we talked a lot in the Q4 call about the operational cost of that in Q4. Customers well taken care of, but we had additional fulfillment costs from being so tight on capacity.”

    Amazon is a fast moving train and same-day delivery is just one of the pieces playing a part in Prime sales growth. An example is implementing a fast shipping option for online shopping. Businesses are partnering with a Same-Day Courier like A-1 Express to offer customers on-demand services and deliver items right to their front door. The New York Courier has a national footprint and the ability to implement effective same-day delivery solutions within major US cities to attract today's online market.

    Reference: 7.28.16, www.internetretailer.com, Don Davis, Amazon reports 28% North American sales growth in Q2

    Wednesday
    Aug312016

    Same-Day Part Delivery for Toyota Begins

    When so many major companies in the retail industry are engaging in Same-Day Delivery, if you sell any type of product, it may not be a bad idea to do it too. The service thrives on volume, and if you are as robust as Toyota is, it makes sense to initiate a delivery program that can feed dealership parts the same day.

    Auto News reported that this is the direction Toyota and Lexus have taken, offering same-day parts availability to their dealerships. As dealerships are able to get their parts faster, daily operational services by technicians will be completed faster. This ultimately produces more happy customers with service, which is an area which dealerships find to be challenging to consistently provide. The service department seems to get the brunt of negative surveys, especially when a customer's vehicle wasn't repaired in a timely manner due to a part not arriving. Now, same-day part deliveries will streamline auto repairs, as well as routing part inventory from one dealership to another.

    The new same-day parts delivery will create positive changes. Parts manager Luciano Restrepo of Keyes Lexus in Los Angeles, which is already doing same day, mentioned in the article that there's been nothing but success so far. Restrepo stated, "That is the best thing Lexus ever did for us -- the fact that we can get a transmission and a vehicle in and out in one day." He went on to say, "I utilize the service every single day." Toyota has made the correlation between faster parts delivery and faster service, equals better service.

    Same-day delivery is going to be something new for Toyota, being that deliveries use to only be made next-day. Yet, faster part service can lower or even eliminate loaner car expenses. Some dealerships that offer loaner cars as a value-added service, may have specific loaner vehicles, but when those are being used, they have to use their used or new car inventory. This results in additional wear-and-tear on them. Faster parts means less loan time. Also, the amount of discounts extended to unhappy customers with delayed vehicle repairs are drastically lowered. In every industry, demand is increasing for higher service levels and companies are seeking to distance themselves from competition with same-day delivery.

    This is why same-day delivery is expected to reach $987 million by 2019. One of the most recent newcomers to provide the service is Wal-Mart. This past June, the world's largest retailer announced the launching of several same-day grocery delivery pilot program in Denver, as well as in another unidentified market in July. In the US alone, Wal-Mart has over 3,400 Supercenters in the US, which positions the retailer to easily provide same-day services within any major US city. It won't take long for a service convenience like this for loyal Wal-Mart shoppers to catch on to it.

    Service has become a big factor in customer loyalty, making it very apparent why Wal-Mart, Amazon, and now auto manufacturers like Toyota, are going in this direction. Many companies turn to a Same-Day Courier like A-1 Express to develop a cost-effective same-day solution that makes sense for them. The Pittsburgh Courier has implemented route delivery services, part returns, long-distance services, and more, all within one day. With a national footprint, Toyota and other manufacturers can outsource to A-1 Express for part shipping throughout the US.

    Reference: 8.15.16, www.autonews.com, Jim Henry, Same-day service aims to give Toyota, Lexus stores competitive edge

    Thursday
    Aug252016

    UPS Revenue Increases, Will It Go Same-Day Delivery?

    When you see UPS investing into Same-Day Delivery, it shows that the service has moved beyond just being a trend. It has become a legitimate staple service that can swing sales toward your business. This is what UPS did at the beginning of this year. UPS conducted a study on same-day delivery and led a $28 million funding round for start-up Deliv. The carrier also became a minority stakeholder in Deliv and sat in on board meetings as well. It's clear that UPS is seeking innovative ways to increase sales.

    The Washington Post recently released an article detailing UPS’s second-quarter revenue results. Sales slightly improved within its' domestic and international package divisions. The report stated that the carrier's revenue increased to $14.63 billion, which is up from $14.1 billion. Analysts surveyed by Zacks Investment Research forecasted growth for the quarter to hit $14.6 billion in revenue. The US domestic package unit went up 4%, along with an average daily package volume up 2.5%.

    2nd quarter figures went up 1.1% in the international package division and 3.9% for daily export packages. Also, for the three months that ended June 30, UPS earned $1.27 billion. This equated to being higher in comparison to $1.23 billion for the same period last year. The increases may not have been what UPS would have anticipated, yet the numbers are positive, especially when you have FedEx and the US Postal Service to contend with.

    Along with FedEx and the U.S. Postal Service, now UPS may have to concern itself with Amazon. The e-retail leader has now leased 40 cargo planes from Boeing and Atlas Air for the purpose of creating an air cargo network. Amazon does state that it isn't planing to build its' own delivery service and is only looking to work closer with package-delivery companies like the UPS, USPS and FedEx.

    Amazon may not have an edge in carrier package delivery services, but it does with establishing same-day delivery. For Prime members, the same-day service is free. Amazon has same-day delivery operating in major US cities, such as San Diego, San Francisco, Seattle, Dallas, New York, Philadelphia, Chicago, Baltimore, Boston, Atlanta, Richmond, Orlando, and more. The e-retail giant has a total of 27 markets that offer same-day delivery and appears to have its' sights on providing it nationwide.

    A Same-Day Courier like A-1 Express can help UPS develop sound same-day logistic solutions throughout the US. The Philadelphia Courier takes the service areas, product volume and more into account in order to deliver at the right price. As a result, companies can experience gains in revenue and new customers due to trying their same-day delivery options.

    Reference: 7.29.16, www.washingtonpost.com, Associated Press, UPS 2Q revenue improves on strength in US, abroad

    Friday
    Aug192016

    More Online Retail Searches Likely Means More Same-Day Delivery

    Technology has affected has consumers shop online. It is no longer taking shoppers time at their home desktop to find good deals. They can easily be at the store register and find just the right discount to save money. This is just one benefit that technology has brought to customers and the latest online retail searches shows it.

    Internet Retailer recently reported that 56% of online retail searches are made via smartphone or tablet, according to a study from web measurement firm Hitwise, a division of Connexity Incorporated. The study included hundreds of thousands online search queries across 3.5 million smartphones and tablets between April 10th and May 7th of earlier this year. The searches were made by consumers based in the US, UK and Australia. The article mentioned that with Hitwise, Smartphones and tablets are considered to be mobile devices.

    Hitwise looked at the specific keywords that retail consumers used for their search. The study found that 82% of them used the words "24 hours" for their searches from mobile devices. Other top searches consisted of keywords like "where to buy...", which was 84%, "near me" at 79% and "hours" was used at 79% mobile. The results show that speed and convenience are huge factors regarding online retail. It makes sense, especially as now more retailers seek to offer value-added online services like Same-Day Delivery to attract shoppers to their sites.

    The study confirmed how mobile devices are being used more to find discounts and deals. Of all the retail searches that mentioned the words “coupon,” “return policy” and “price match”, 77% of them were made from mobile devices. 73% of searches with the words “sale” and 68% of “discount” searches are made on a mobile device also. Yet, the study showed that 59% of searches that include “promo code” are made on a desktop. Therefore, for in depth searches for promo codes that may require time, the desktop still slightly ahead of smartphones and tablets.

    Hitwise senior research and marketing analyst John Fetto talked about how online retail searches is aiding shoppers, even at checkout. He stated “Especially for traditional brick-and-mortar establishments, the smartphone has become an indispensable shopping tool providing consumers—sometimes within feet of a register—with information or offers that could seal or jeopardize a transaction". No one expected technology to impact online retail as it has, and it is dictating what retailers are doing to capture immediate sales.

    The increase in online retail searches leads to as fast purchasing online, as well as fast delivery of those items. Many retailers and companies are partnering with a Same-Day Courier like A-1 Express meet the service demand that shoppers want. The Charlotte Courier has a national footprint and the courier expertise to develop the delivery solutions retailers need, especially as the holiday season approaches. When a retailer can offer same-day delivery and store pick up services, they can capture the market segment of the shoppers that want the deal they found delivered to their front door.

    Reference: 7.26.16, www.internetretailer.com, April Berthene, 56% of online retail searches take place on mobile devices

    Thursday
    Aug112016

    London's Sainsbury Goes Same-Day Grocery Delivery to Compete With Amazon

    It takes more than online sales to compete with Amazon and most retailers know it. Grocery store chain leader Sainsbury in the UK has concluded as well that a Same-Day Delivery option is key to meeting the service demand by today's shoppers. Amazon is doing it. Sainbury announces it is going to do it too.

    Sainbury is rolling out its' own model of same-day grocery delivery service in over 30 areas in England by Christmas of this year. The grocery retailer currently does next-day delivery on all orders placed before 11pm, as long as a delivery slot is available. The new grocery service will provide grocery delivery to shoppers that order online by noon, which will be received by 6pm that day. To also meet its' customer service options, Sainsbury will have a pick-up option that will be ready to pick up from 4pm. Customers will have a variety of ways to get their online products into their hands.

    The article discussed how Sainsbury will be charging up to £7 for its same-day grocery delivery services. Like Amazon, Sainsbury’s Delivery Pass membership costs between £30 and £60 a year. Shoppers can also pay no delivery fee for all orders over £40. Amazon had found the formula to thriving online by creating a loyal customer customer base via Prime, and Sainsbury seeks to do the same.

    Sainsbury isn't the only grocery store retailers that is gearing up for the upcoming holiday season. The world's largest retailer Wal-Mart launched its' pilot program of same-day grocery deliveries in Denver, as well as another unidentified market last month. Wal-Mart partnered with Uber and Lyft ride-hailing services to perform the actual pick up and deliveries. If all goes well, Wal-Mart will probably expand the service. As the biggest shopping season approaches, it's critical to have same-day grocery delivery to have been proven, especially as retailers like Wal-Mart have same-day delivery of non-grocery items in their sights.

    Wal-Mart also has made similar implementations with Sainsbury, as it has begun to offer its' new ShippingPass membership program. Wal-Mart Stores Inc. launched ShippingPass to keep pace with Amazon's Prime services. ShippingPass provides free shipping with two-day delivery for all members, which pay only $49 per year for memberships, in comparison to Amazon's for $99. Shoppers on WalMart.com will have access to online items such as electronics, clothing, health products, and more. The retailer has over 3,400 Supercenters throughout the US and has all the pieces necessary to easily perform last-mile deliveries.

    Like Sainsbury, Wal-Mart plans to offer same-day delivery as well. As Amazon continues to expand it's own same-day delivery program, more and more retailers are implementing the service. A Same-Day Courier like A-1 Express can partner with retailers to help establish the delivery component of their web presence. The Phoenix Courier has hundreds of companies that it has provided optimal same-day delivery solutions for nationwide. Shoppers have become comfortable with online shopping and the retailer that can utilize same-day delivery to get products conveniently into their hands, will be the ones that compete against Amazon.

    Reference: 7.21.16, www.dailymail.co.uk, Sean Poultner, Sainsbury's takes on Amazon with same-day delivery pledge