The award for special delivery arguably goes to Santa Claus, but this holiday season delivery may also prove to be the competitive edge for retailers.
In this article, I take a look at the latest moves by Walmart and Amazon to extend Santa’s supply chain with same-day delivery. Readers of my CMSWire article series will not be surprised that I see an important role here for case management.
The Battle of the Brands
While brand continues to be THE foundation for retail success, the supply chain is once again shaping up to be a top weapon in the battle for the customer.
With 180 million shoppers annually, Walmart takes the No. 1 position on the Interbrand U.S. Most Valuable Retail Brands by a large margin for 2012. Yet Walmart's brand value actually decreased over the last year as shoppers continue to spread their spending. In response to these changing shopping behaviors and market pressures on its brand value, Walmart is doubling down on its strengths, including its well-recognized world-class supply chain mastery.
Amazon reached the No. 9 position in the 2012 Retail Brands list, increasing its brand value by 32 percent, and also appeared as a Top Riser on Interbrand’s Top Global Brands list. Amazon’s upward path is built in part on strong growth and emphasis on B2C and B2B fulfillment services.
What do the Interbrand placements tell us about our favorite retailers? "One of the most compelling lessons from the list is that the best brands didn't stand idly by, waiting for further signs of recovery. They contributed to it by anticipating their customer's desire to return-not to shopping as usual-but to something better," says Bruce Dybvad, CEO of Interbrand Design Forum.
Why Compete on Same-Day Delivery?
This year, Walmart and Amazon are competing head on for the holiday buying season with same-day delivery. As NBC’s Janet Shamlian recently reported, “Whoever masters same-day delivery will be the winner.”
For Walmart, it is a way to counter the e-Commerce convenience of Amazon and signal their intent to compete across all channels. Packaging Digest notes, “While ecommerce sales are just a sliver of the [Walmart’s] overall revenues, the distinction between online and offline shopping is becoming more and more blurred. With the retail landscape changing so rapidly, it makes sense for the firm to engage in low-risk experiments like same day delivery [for products ordered online].”
For Amazon it is a way to deliver the “instant gratification” that a traditional brick and mortar retail store provides. Amazon is trying to neutralize that advantage by offering same-day delivery for some products in a limited number of areas.
How to Deliver Same-Day?
Just as the motivation for pursuing same-day delivery is different for Walmart and Amazon, so are their respective execution approaches. Both are dependent on their positions in the marketplace and concomitant strengths. While neither Walmart nor Amazon have Santa’s special delivery abilities, they do each have unique supply chain strengths that can be leveraged.
Amazon launched same-day delivery from their warehouses in 2009 for ten cities, including Boston, Chicago, Las Vegas and Seattle, and their distribution centers will total about 60. Slate’s technology columnist offers insight into Amazon’s strategy:
Now that [Amazon] has agreed to collect sales taxes, the company can legally set up warehouses right inside some of the largest metropolitan areas in the nation. Why would it want to do that? Because Amazon’s new goal is to get stuff to you immediately — as soon as a few hours after you hit buy. Same-day delivery has long been the holy grail of Internet retailers, something that dozens of startups have tried and failed to accomplish. But Amazon is investing billions to make next-day delivery standard, and same-day delivery an option for lots of customers. If it can pull that off, the company will permanently alter how we shop.”
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