As shoppers increasingly demand that everything from hot meals and groceries to dresses, bedding and electronics be dropped off at their doorsteps, retailers are betting big on delivery services that will get them there faster.
In the latest development, Amazon, which played a crucial role in raising shoppers’ expectations for near-instant gratification in recent years, announced plans Thursday to assemble its own fleet of delivery vans that would be operated by independent contractors.
Other companies are also thinking of radical new initiatives to get their products into customers’ hands more easily, helping to transform shopping as we know it.
Here’s a look at the shifting environment for deliveries:
WHAT ARE RETAILERS DOING TO DELIVER PRODUCTS FASTER TO SHOPPERS’ HOMES?
Many have been expanding services that let online shoppers pick up their orders at the store. But the latest strategy? Delivering products to customers’ homes on the same day.
Walmart plans to expand same-day grocery delivery to more than 40% of U.S. households, or 100 metro areas by year’s end. It will continue to use ride-hailing services but is also testing the use of store employees to drop off merchandise at homes at the end of their work shifts.
Amazon and Walmart are also testing smart-lock technologies allowing delivery people to enter a shopper’s home and restock the refrigerator.
WHAT KIND OF A CHALLENGE DOES THIS POSE TO THE LIKES OF FEDEX AND UPS?
Amazon uses the big parcel delivery services, along with smaller firms and the post office. But it has also started its own air fleet of 40 planes, rolled out a convoy of trucks and built its own distribution centres.
UPS and FedEx leaders have long scoffed at the idea that Amazon could turn from a customer to a competitor, and most analysts have agreed–and still do so.
Losing more of Amazon’s business would hurt the delivery giants but not crush them. Analysts estimate UPS gets up to 6% of its revenue from Amazon deliveries, and FedEx about 3%.
UPS, for example, uses about 117,000 trucks and 500 planes and employs 2,700 pilots to deliver 20 million packages a day on average worldwide.
BUT WON’T ROBOTS TAKE OVER FOR HUMANS IN DELIVERING PRODUCTS TO HOMES?
Not yet, at least. Only a few retailers and restaurants are testing driverless cars for deliveries.
Kroger says it plans to start a self-driving delivery service by the end of the year, becoming the first U.S. grocer to make deliveries without a human riding along in case something goes wrong.