When’s the last time you bought something on Amazon that you could have easily bought from the brand’s own website? When’s the last time you browsed through an e-commerce platform, filling up your cart with would-be purchases, only to be dissiuaded at the last minute by the 5–7 day shipping delay (or even worse, the 2–3 day shipping delay with a $25 price point)? If you’re like me, an avid online shopper and millennial, basically the crown jewel of e-commerce target marketing, the answer is always. I used to buy my face wash on Deciem.com, and pay $5 for 3–5 day shipping (about 1/3 of my cart total), Royal Canin dog food on Mondou.com, and pay $7 for 1–3 day shipping, and books from Indigo.ca, and pay $5 for 4–7 day shipping (again, about 1/3 of my cart total). And this is just to name a few. Now, all those items get bought on Amazon. Why? Every single one of them qualifies for Amazon Prime. For $79/year, every purchase arrives today or tomorrow. All added up, my shipping fees from individual websites far exceeds that price. Sure, Deciem still makes some money, but Indigo and Mondou lose out. Plus, if I’m not checking out on their website, I’m definitely not browsing through and adding other, new products to my cart. Last year alone in Canada, there was $8Billion dollars in cart abandonment due to inadequate delivery options.
So, Amazon is killing it. Tell me something I don’t know, right? Well, for starters, they are able to provide same day or next-day deliveries because they are opening distribution centres everywhere. They have 75 fulfilment centres and 25 sortation centres in North America. That’s one for every major city. The truth is, other online retailers cannot afford to open up that many new DCs in order to compete. But what if they didn’t have to? What if they already have that kind of presence, and it’s just not being utilized efficiently?
With an omnichannel solution that provides integrated inventory systems, every storefront becomes a DC. And most large brands, like Mondou, Indigo, Sephora, Forever21 etc., have multiple brick-and-mortar locations in ONE city! Now, imagine if you could ship from these storefronts. Delivery times would be slashed, there would be more delivery options at checkout, excess in-store inventory could finally serve a purpose (H&M has $4Billion in unsold clothes in their stores), and packaging would cost so much less!
E-commerce is experiencing 25% year-over-year growth. 45% of retailers already have integrated inventory solution, and that number is increasing 27% year-over-year. While this solution of course provides retailers with better inventory management techniques, some retailers are finally catching on that the benefits aren’t so limited, like Michael Kors and Zara. Zara is going to start shipping from there over 2000 international stores by the end of the year. Michael Kors has similar plans. Their customers will receive packages much quicker and for lower fees, and their stores will have a new way of staying relevant in the e-commerce era.
Which online shopper is not going to absolutely love this? We already know that more and more shoppers are switching over to Amazon for all their purchases. Amazon steals customers from e-commerce platforms that can’t compete. Plus, 80% of online shoppers want same-day shipping, yet only 30% of retailers offer that. More and faster delivery options convert into sales.
Startups like Deliv in the US and BoxKnight in Canada are providing the last-mile delivery solution that is needed to make this a reality. Both offer deliveries within 24 hours of purchase, even allowing customers to select smaller delivery-windows for their convenience. While Deliv allows drivers to pick up deliveries on route, meshing scheduled deliveries with pickups, BoxKnights picks up from retailers twice a day, and route optimizes every delivery so as to create the most condensed routes, and not to bother the storefronts with 12+ pickups a day. Both utilize an API to offer their service as an option at checkout and grab customer information. The appropriate stores get notified that a package needs to be prepared, and that’s it.
All to say, omnichannel solutions have far ranging advantages, from inventory management to creating easier operational processes. But the consumer sees none of that. It doesn’t matter how smoothly things run on the retailer’s end if customers are still turning away from their websites to buy similar products on Amazon because they’ll get it the next day for next to nothing. How retailers use their omnichannel solutions to get their products to customers faster is the real, most valuable game changer.