Amazon Set To Launch Same-Day Delivery Grocery Service In New York

Amazon is doing a lot of good things with its' same-day delivery grocery service AmazonFresh. It is a service many experts didn't expect to go this far, yet Amazon is proving the naysayers wrong. The service is having success in various cities, as Amazon has established the service on the west coast. Now the retail giant is making leaps to expand the new service to one of the biggest cities in the US--New York.

Internet Retailer reported Amazon has announced it will be launching AmazonFresh in the New York. This will be the first actual launching of the service on the eastern coast of the US. The retail giant has already started Amazon Fresh in San Francisco, Seattle, and Los Angeles. AmazonFresh customers pay a $299 annual fee for free delivery of orders of more than $35, which includes delivery of the items Amazon is more known for selling—such as books, movies, toys and electronics. Currently, Amazon charges $10 per for all orders under $100 bucks, and if it is over $100, there is no charge for delivery.

There is some concern on whether the branding of Amazon will be received by customers to actually buy groceries from the online retailer. “To me the competitive advantage is the brand,” stated Tom Forte, a senior analyst with Telsey Advisory Group LP. “It’s having customers who are familiar with Amazon, who have been ordering with Amazon for an extended period of time, that can deliver them groceries and other items from Amazon in a timely manner.” Amazon is widely known for offering a variety of products, yet will the company be able to market Amazon Fresh just right to create the same level of trust by customers relative to groceries.

Amazon will also have its' fair share of competition on the east coast. Two of the big name online retailers that are already performing same-day delivery of groceries there is Peapod and Fresh Direct. Peapod is the leading grocery service provider, which reached $525 million in online sales in 2012. The company is already services Chicago, New York, Philadelphia, Boston, Milwaukee, Washington DC, and Indianapolis. Fresh Direct had $400 million in sales the same year, yet only services New York and Philadelphia.

Forte also stated in the report his thoughts on why Amazon is in the grocery delivery business in the first place. “AmazonFresh is another same-day-shipping-type move by Amazon that’s all about getting people to buy products on Amazon and not somewhere else. The reason that Amazon is interested in grocery is because the frequency of delivery. Amazon wants to have multiple touch points with the consumer and this is another move in that direction.” This will also add to the volume of service and increase profit per delivery, especially because the delivery price is has to remain at low cost for shoppers to buy into it.

Time will tell whether Amazon's same-day delivery of groceries in New York will be well-received by customers there. Either way, Amazon will still need an effective delivery solution to make sure the groceries arrive at the customer's front door on time. Same-Day Couriers like A-1 Express can partner e-retailers like Amazon and perform same-day grocery delivery nationwide. The New York Courier has the courier expertise and innovation to quickly implement same-day delivery to help Amazon continue to gain ground in the grocery retail market.

Reference: 12.13.13, Internet Retailer, Stefany Moore, Can Amazon sell groceries in the Big Apple?

UPS Rates Increasing In 2014, E-Retailers Can Use Same-Day Courier

Shipping your packages as a customer is one thing, yet shipping packages as an e-retailer is another. Transportation makes up 25-35% of the cost of a product, therefore, on a volume scale it is crucial to have a shipping system that is cost effective. Most e-retailers utilize worldwide carriers like UPS to conduct loads of shipping functions for them. If their shipping costs go up, it will directly effect the retailer.

Now with the latest news about UPS and their upcoming rates for 2014, retailers will definitely have to see how they will adjust to the rate changes. UPS has announced its’ rates will have an average increase of 4.9% in 2014, reported Internet Retailer. The new rates will actually become effective as of December 30th. of 2013. Where e-retailers will really experience the hit is in regards to small packages, which is what e-retailers mostly ship. This is what the president of LJM Consultants Ken Wood stated in the report, which is a firm that advises retailers and other shippers on shipping costs.

What happens with the increase of shipping costs by UPS, and even Fedex, is based on certain factors, which determines the types of freight that will go up the most. In the case with UPS, the price increase will actually affect lighter shipments more than heavier shipments. Both UPS and Fedex divide up their shipping destinations into zones and than bases the shipment rates on where the freight is going. For example, a shipper’s home zone traveling two zones over is shipping to Zone 3. Along with the weight classification, they both determine the overall shipment rate. The higher the combined weight and distance, the more the customer will pay.

With this in mind and the rate increase, e-retailers which ship packages that are ten pounds or less, will feel the hike in price by UPS the most. Ken Wood gave an example in the report of how a three-pound package to a zone seven will increase by 7.84%. This equates to a jump from $8.55 to $9.22. In contrast, to ship a 130-pount package to zone 5, will only go up by 2.61%, which equates to an increase from $65.01 to $66.71. For one small package for an e-retailer this doesn’t seem like much, however, when you calculate this in terms of high volume, it is a bit of an increase.

With the rate increase by UPS, many e-retailers will probably seek out new shipping strategies and concepts to get their products in the hands of their customers. Business trends are definitely changing as it relates to e-commerce. Customers are even wanting their packages faster, which has opened the door wide open for same-day delivery. This is the direction a number of e-retailers have turned to as another delivery solution. Large retailers such as Wal-Mart, eBay, Amazon, Macy’s, Target, and more, have all begun to engage in same-day delivery.

For long distances, UPS will probably be what e-retailers will have to continue to go with. However, the creation of closer fulfillment centers and shipping from physical retail stores, creates the viable option for same-day delivery to work. E-retailers can turn to a Same-Day Courier such as A1Express and have their online products delivered locally in a matter of hours. The Kansas City Courier has a national footprint as well, enabling it to assist e-retailers locally on a national scale.

Reference: 11.25.13, Internet Retailer, Paul Demery, Average UPS rates will go up 4.9% in 2014

US E-Commerce Set To Reach $434 Billion By 2017, Retailers Can Use Couriers

Many have been watching the growth of e-commerce over recent years and has not slowed down. It's growth is currently at an average of 16% per year. E-Commerce sales appear they will continue to do so in the years to come as well. Experts have now put numbers to their findings and show they will reach very high by 2017.

According to eMarketer Incorporated, e-commerce sales will reach $434 billion by 2017 reported Internet Retailer. The projection is at a compounded annual growth rate. 2013 sales are expected to reach $258.9 billion. This is up from sales for 2012, which ended at $225.5 billion. This is also an increase from 2011, which was 15.8% at $194.7 billion. They project the numbers will taper off yearly and will be as the following: 14.6% in 2014, 14.2% in 2015, 13.6% in 2016 and 12.8% in 2017.

The report discussed how mobile devices are weighing in as a key component to the projected online growth. EMarketer has find that currently smartphones and tablets are accounting for 11% of e-commerce sales. They project by 2017, mobile devices will steadily grow, and they will account for 25% of all e-commerce sales. This is a large percentage considering this means one fourth of all e-commerce sales shoppers will perform transactions on-the-go, at home, or somewhere else. This shows shoppers will continue to seek convenience and speed to get their online purchases in their hands.

Web sales increase will be largely seen in the category of computers and electronics. These categories will account for $56.8 billion in 2013, equating to 21.9% of all e-commerce growth. Apparel and accessory categories will also rank as being on high online demand by shoppers. They will reach $54.2 billion this year, which equates to 20.9% of web sales this year. Shoppers have products they are looking for on the web and will be cross-shopping to get the deals they are looking for, especially with knowing there will always be a deal available if they purchase online.

Web traffic has a lot to do will the forecast as well. There is an increased online traffic for retail giants like Amazon in 2012, where online traffic grew 3% in the fourth quarter at 115 million. Macy's online traffic grew 11% in the fourth quarter at 118 million. There certainly appears to be a trend that e-commerce is steadily growing and consumers are more comfortable shopping online. With the increase of e-commerce, many online retailers such as Wal-Mart, eBay, Nordstrom's, Target, and more are testing same-day delivery for their e-commerce sales to offer the components of online shopping customers are looking for.

A same-day courier like A-1 Express can assist retailers capitalize on the e-commerce growth. This nationwide courier is able to develop a courier logistics solution that fits the online delivery needs of retailers. As e-commerce continues at this fast pace, an optimal delivery system by a same-day courier will be just what e-retailers need to compete through 2017 and beyond.

Reference: 4.25.13, Internet Retailer, Allison Enright, U.S. e-commerce sales could top $434 billion in 2017

Boston Consulting Group Surveys Same-Day Delivery, Will It Make It?

Same-day delivery has been in hot pursuit for a number of large corporations and businesses over recent years. With an average annual growth of online sales of 16%, it is no wonder why companies are seeking to create a competitive advantage and provide a faster delivery service to meet online demand. However, some are asking will same-day delivery last or will it be merely a trend?

Yahoo News reported The Boston Consulting Group conducted a survey of 1,500 consumers regarding shopping online. One question asked is what would attract them to shop more online. Only 9% of the consumers stated same-day delivery would inspire them. More than 75% of those surveyed stated free delivery would persuade them to shop online. Lastly, 50% of them stated lower prices would be the trigger needed for them to conduct online purchasing.

The survey also provided insight into what consumers would be willing to pay for same-day service. Consumers said they would pay an average of $7.50 to receive a $50 purchase delivered via same-day delivery. The important comparison with this fact is that this amount is lower than what retailers, e-retailers and online companies are currently charging for this level of service. Therefore, the cost issue must be resolved if same-day delivery will last.

The survey shows concerns on whether it will be profitable. In the report, the Urban Americans between the ages of 18-34, with a household income of $150,000, only account for 2% of those that will buy into same-day delivery. This means demand is a great concern. "The demand for this service and the willingness to pay do not match the cost of providing it," said Boston Consulting Group partner Rob Souza.

Many large companies have already been providing and competing relative to same-day delivery. With companies such as Wal-Mart, eBay, Macy's, Target, and more in the race for making deliveries the same day, it causes many to suspect same-day delivery must be profitable. eBay created a same-day service called eBay Now. The online giant began testing same-day delivery in San Francisco and they now provide the service in several areas. They now have same-day delivery in Brooklyn and Manhattan, New York. Delivery is $5 per order, with a minimum order of $25. Also, same-day delivery may result in the shopping advantages consumers want.

Experts even think Amazon could be after same-day delivery with the continual building of distribution centers throughout the US. Amazon's recent announcement is it will be building three new distribution centers in Texas. There will be two Dallas-Fort Worth distribution centers, which will be a 1 million-square foot site in Coppell, TX and the distribution center in Haslet, TX will be 1.1 million square foot. Another will be in San Antonio, located in Schertz, TX, which will specialize in handling large items. Amazon has opened 20 distribution centers and 79 fulfillment centers worldwide.

Many investments are being made to make same-day delivery successful. Same-day courier services like A-1 Express can assist any business develop a successful same-day delivery solution. This Cleveland courier is able to pick up anything from small packages to palletized freight fast! A-1 Express is an experienced, professional courier servicing over 1,500 clients, including Fortune 500 companies. A-1 Express is a viable option for large retail corporations to partner with and help same-day delivery last.

References: 2.5.13, YahooNews, Alistair Barr, E-tailers embrace same-day delivery, but U.S. shoppers shrug: survey

US Postal Service Ending Satuday Service On August 5th, Use Couriers For Saturday Deliveries

The US Postal Service has had its' share of financial challenges in recent years. The Post Office, at one point was losing $25 million per day. The mail giant had to make some pivotal decisions for its' literal survival and it appears this past week, it did.

CNNMoney has reported the US Postal Service has announced it will end Saturday delivery service of first class mail as of August 13th of this year. The company will stop delivering and collecting other types of mail as well. However, it will continue performing package deliveries. The new service change will begin to save the US Postal Service $2 billion per year. Postmaster general and CEO Patrick Donahoe stated, "It's a responsible decision. It makes common sense". The USPS has been providing Saturday delivery service to US citizens since 1863.

The USPS will pursue to handle the service change as best as it can. The report stated 22,500 jobs will be affected by ending Saturday service. The company is opting to eliminate overtime, increase use part-time employees, and offer buyouts, opposed to resorting to a layoff strategy. There will be no changes to offices that are currently open on Saturdays and they will still conduct po box deliveries. The USPS understands that its' employees need to keep their jobs.

The service cut comes as a result of the financial downward spiral and losses the USPS has incurred since 2006. The root cause of their current state is its' government mandate to pre-funded health benefits for future retires, which amounts to $5.5 billion due each year. In 2012, the company defaulted on $11 billion and hit the ceiling on their US Treasury $15 billion credit limit. Congress did discuss a new five-year plan, which included ending the billion dollar reoccurring payment, however, there has been no resolve thus far. The Postal Service went from no debt in 2005, to $25 million per day in losses as of last year. They could no longer wait on the government and acted now.

First-class mail volume for the USPS has decreased 25% since 2006, and is forecasted to continue to decline. The US Postal Service is seeking other ways for sales growth. The mailing company is currently testing same-day delivery via Metro Post in San Francisco in hopes to gain ground in another service market. It is no secret same-day delivery is a viable option that customers desire and it works. However, with the USPS not providing Saturday deliveries, the question who will customers and business shippers turn to for their mailing service needs.

Same-day courier services like A-1 Express can assist individuals and businesses make their Saturday mail deliveries. The San Diego courier offers same-day delivery mail solutions from small packages to palletized freight fast. With their courier expertise and route optimization, A-1 Express is able to help companies make a seamless transition from usage of the Postal Services' Saturday delivery service. A courier can meet the increased customer Saturday delivery demand that is coming once the USPS ends their service in August.

Reference: 2.6.13, CNN Money, Jennifer Liberto, Postal Service to end Saturday mail service Aug. 5