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Amazon raises the bar with same-day delivery

Amazon logo
So why’s the Amazon logo smiling? ‘Cause they just outclassed all their competition yet again.

For all of us in the Internet marketing space, keeping up with Amazon is a mighty tough race. They set the standard in delivery, logistics, and customer satisfaction, which is where they devote all their brand-building efforts, rather than in marketing.

Today, Amazon announced that it will be offering same-day shipping for thousands of items in the cities of New York, Washington D.C., Seattle, Boston, Baltimore, and Las Vegas, with Chicago, Indianapolis, and Phoenix to be added over the next three to four months. Shoppers who have same-day shipping available will be prompted during the order process. Amazon Prime customers will receive same-day delivery for $5.99 per item while all the rest of us schmucks will fork over two to four bucks per pound for the privilege (talk about impulse control!).

Thus way upping the ante on other Internet merchants and ecommerce entrepreneurs. The better Amazon gets at delivering orders hyper-fast, the more customers will start expecting to have their items lickety-split, and the harder it will be for more modest and shoestring entrepreneurs to make a sale.

It may help at this point to remember that the secret to WalMart’s phenomenal growth is that its business strategy forced it to become the best and most technologically advanced logistics company in the world. By painting themselves into a losing corner by locating stores in low population areas, WalMart rose to the challenge and developed the most efficient trucking system in the world and backed it up by racing decades ahead of all the competition in the information technology supporting all that warehousing and trucking.

It was no mistake that when Sam Walton retired, they hired a trucking executive, Scott Green, to become the CEO of WalMart. I have heard more than one business strategist refer to WalMart as primarily “a trucking company, not a retail company.”

By the time WalMart’s competition began to feel the pinch of WalMart’s low price strategy — after WalMart began building stores in larger population areas and going toe-to-toe with other discounters — WalMart was so good at logistics and the information technology behind it that they were uncatchable. Try as they might, the Targets and K-Marts of the world will never be able to run even with WalMart, so they will always have to tack on a (slight) premium for their logistics inefficiencies.

It’s becoming apparent that Amazon is pursuing a similar strategy by becoming the best, fastest, and most accurate shipper in the ecommerce space. Juggling a complex dance of JIT inventory, warehousing, information technology, data sharing with vendors, and just plain good old fashioned hustle, Amazon may soon be uncatchable in terms of satisfying customer orders.

WalMart, through its innovations, was able to carve its inventory turnover rate down to a matter of hours (as compared with days for all its competitors). It’s now aiming at leveraging its superhuman information technology prowess to reduce that turnover rate to seconds — yes, seconds. Inconceivable just five years ago, all the pieces are in place to make that happen. And if anyone has the ability and market power to achieve it, it’s WalMart.

If it ever happens that you order something online and get it within minutes — inconceivable now, granted — it’s probably going to be Amazon that achieves it first.

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