Small retailers have faced heavy competition from Amazon as the big company has raced to dominate e-commerce. One of the greatest advantages Amazon has had over competitors is its logistical efficiency, quickly moving products to customers before competitors are able. That might be changing though, as FedEx has announced a new program that will allow smaller retailers to directly compete with Amazon on delivery speeds. Bloomberg’s Thomas Black reports on the new program, writing:
FedEx sees potential profit in the competitive pressure online stores face in keeping up with Amazon’s drive to reduce delivery times on purchases. About half of online purchases occur after 4 p.m., Carere said. FedEx’s new extended-hours service seeks to help retailers such as AutoZone Inc. and Best Buy Co. to meet those demands.
Under the program, FedEx Express drivers will pick up packages as late as 2 a.m. from retail stores and take them to sorting hubs. Deliveries can happen as soon as the next day within the local market, and within two days for destinations elsewhere in the U.S.
FedEx began testing the idea in Los Angeles and Dallas in late 2017 and has since rolled it out to 100 markets. The service hasn’t required additional investment or setting up new routes, Carere said.
“We’ve really seen a change in the market where retailers have recognized that their physical distribution is a competitive advantage and it allows them to actually get things faster to market,” she said. “This is from point of fulfillment to delivery, all within a 24-hour cycle. That’s very, very competitive.”
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Jeremy Jones, CFA
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