November 28, 2013

Same Day Shipping

Let's get this straight:
  • Amazon is doing same-day shipping in various markets, partnering with the USPS.
  • Google is testing same-day shipping services.
  • eBay is executing same-day shipping in various markets on behalf of major "brands".
How about us ... catalogers? What's our plan? Who are we partnering with

For customers, tiers are being developed. Move to big cities or lose:
  • If you live in an urban area, you are blessed. You have 50mbps internet, and eBay will get you something from Macy's in sixty minutes, for free.
  • If you live in a rural area, well, thanks for playing. You have 3mbps internet, and Lands' End will get you an order in ten days with free shipping.
Businesses are sifting into tiers as well ... the 1.0 generation (Amazon / Google / eBay) using same-day (or same hour) shipping to compete against retailers. Retailers, meanwhile, are being distracted with the obviously misguided strategy of turning a mall-based store into a digital distribution center - I mean, be honest - name a customer who wants to get into a car, drive 20 minutes, try something on, realize the right size is not available, then get it shipped next-day from a store in Dallas when the customer could get the same item (or comparable enough of an item) in three hours from Amazon without ever leaving home (and possibly not paying sales tax, either)?

Be honest, folks. Omnichannel cannot compete with that. Omnichannel is a distraction that benefits vendors, and provides a temporary sales lift for retailers that did a poor job of stocking/fulfilling merchandise in the past.

And worse - read this (click here), eBay now turns Best Buy and Office Depot and other "brands" into nothing more than glorified eBay vendors. The retailer perceives a competitive advantage, while eBay captures (big) data and invades the customer relationship. Long-term, this is going to become a problem for retailers - much in the same way that the Borders / Amazon relationship was a disaster for Borders. You simply don't want a competitor hijacking the customer relationship, folks. It's one thing for FedEx to insert itself into the customer relationship. It's quite another thing for eBay or Google to insert itself into the customer relationship (image below from the eBay Now site - selling Best Buy products - with Best Buy disconnected from the customer relationship - now nothing more than an eBay vendor - go #omnichannel).




They're trying to destroy you, my dear retail clients. And the punditocracy is cheering them on.

Catalogers, meanwhile, are being thoroughly out-hustled. Amazon/Google/eBay have taken the fight to retailers, and have won Jennifer in the Judy / Jennifer / Jasmine equation (won via e-commerce and service. With Jennifer won over, the fight is for Jasmine (and that fight will be won via mobile and service). Catalogers, meanwhile, applied a "multi-channel" approach of using paper to push customers online. Judy, with her 3mbps online presence and no opportunity of ever getting a delivery in the next-hour from Macy's via eBay, is locked-in to catalogs ... for another 5-10 years ... and then what?

Catalogers are going to have to unite - Amazon / Google / eBay have "scale", as the pundits say. Catalogers, in total, have "scale". Catalogers can get what we want, but it's going to have to be as a unified front, all working together.

What are the odds of that happening?

Discuss.

P.S. Don Libey once called malls "future Cities of the Dead" (click here please). That was 2005. Here we are, nearly a decade later, and we're hyping the process of turning a mall-based store into a digital distribution center. In a world where eBay delivers a Best Buy product to your home in one hour, describe what type of a retail experience Best Buy can provide that would cause you to get in your car, battle traffic, drive 20 minutes to a store, and then stare at a bunch of merchandise?

P.P.S.  If this omnichannel customer is so darn valuable, then explain why 27% of e-commerce happens at Amazon? Wouldn't the most valuable customers shun Amazon in favor of a branded, retail + catalog + online + mobile experience offered by the omnichannel merchant?