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Supply Chain: Retailers step up their game to compete with the ‘Amazon Effect’

Supply Chain: Retailers step up their game to compete with the ‘Amazon Effect’

Mayo 5, 2017

Autor/Fuente: CSA 👤Periodista: Daniel Camilo Traslaviña Amador 🕔05.May 2017

The “Amazon effect,” or the impact of digital on traditional retailing, is forcing retailers to step up their game.

As retailers strive to incorporate new services to satisfy shoppers both in-store and online, their first priority is adding services to compete with the promise of free shipping.

Seventy-five percent of online shoppers are “greatly impacted” by free shipping when they make purchase decisions — no doubt due in large part to the Amazon effect, according to the “2016 Home Delivery and Final Mile Services Report,” from AlixPartners.

In fact, the maximum acceptable delivery time among omnichannel shoppers has declined 13% since 2012 to 4.8 days, according to data.

While retail segments struggle to meet these expectations, many are taking steps to become more competitive.

The footwear segment is most aggressive in this category — so much so that footwear companies now feature the shortest average delivery time and the lowest average free shipping threshold. Specifically, the category’s free shipping minimums range between $24.99 and $100, and deliveries end up in customers’ hands on average, within 5.6 business days, the report said.

“[Companies] bundled free shipping with their tiered rewards program, which includes both standard and premier levels that reward customers based on their loyalty and engagement,” the report said.

Specialty retailers also continue to ramp up their e-commerce offerings, hoping to slowly chip away at Amazon’s lead. However, free shipping minimums range between $40 and $75, and as a group, they offered one of the longest average delivery commitment times — clocking in at almost a full week. Of course, this is not across the board. The shortest delivery commitment is three days, while the longest is eight days.

“Our perspective is that specialty retailers are slowly adapting to this choppy climate, providing trend at a value but free shipping at a slower pace,” the report explained.

Department stores are also making an effort to bridge the gap between online and retail shopping, and adding more services, including “buy-online pick-up in store,” “reserve online, try on in store,” and “curbside pick-up” strategies. Similar to their specialty retail counterparts, this segment’s free shipping minimums range between $49 and $99, and average delivery commitments stretch six business days.

There is a similar story among off-price retailers, when it comes to free shipping minimums ($49 to $99), and average delivery commitments (six business days). However, this segment is not making efforts to compete with Amazon’s two-day free shipping plan. However, this makes sense since this group relies very heavily on in-store sales and the in-person bargain hunting experience, according to the study.

Fuente: CSA

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