Free shipping? I got your free shipping, right here
It may not be Thanksgiving, but for retailers, the holiday shopping season is already here.
eBay bought same-day delivery service Shutl, while Amazon is trying to turn more of its customers Prime. Every year, the ability to deliver goods quickly and cheaply becomes more important especially online where competition for customers is fierce.
To understand the changes eBay is going through, think back to the early 90’s and a delivery service called Urban Fetch.
“It would deliver a DVD, which like now, what are those? And then it would deliver ice cream with it or pick up a gallon of milk for you or send a gift, and they’d wrap it for you, it was kind of genius.”
Jen Drexler, Senior Vice President of Insight Strategy Group, a research and strategy firm for retail, says the courier industry is what eBay wants to get into.
“eBay, going from a grandma somewhere selling off her Beanie Baby collection, is now partnering with stores like Home Depot and Macy’s and GNC and Bloomingdale’s even,” Drexler says.
eBay says its eBay Now service can deliver some products in an hour. And it’s expanding to 25 new locations by the end of next year. This way, says Drexler, you can avoid brick-and-mortar stores entirely.
Even Google is getting into the delivery business, with a service rolled out in San Francisco. But according to Ben Schachter, a senior internet analyst at Macquarie Securities, it’s a little less automated than other delivery services.
“They will literally send a courier,” Schachter says, “to walk into that retail store, buy something for you and bring it to your door.”
Scott Galloway, a professor of marketing at NYU’s Stern School of Business, think the future of eBay is because of another retailer: Amazon.
“Effectively what’s going on here is Amazon is disrupting the entire retail industry,” Galloway says.
According to Galloway, eBay is trying to compete with Amazon’s Prime service, which offers free two day shipping to its members. While Amazon is trying to sell more of its customers on Prime where for $79 a year, customers get free shipping. Galloway says Prime is a great deal, for Amazon.
“What Amazon prime really is, is an entry point or membership into the Amazon franchise.”
The super store hopes that while customers are online, browsing through free movies, you may see something you like, enough to buy.
“So even though they lose money on shipping,” says Galloway, “they make it up in the incremental purchases.”
Galloway says quick shipping means more customers and more sales. Amazon Prime customers spend more than twice as much as others and other retailers want a piece of that pie.
But Ben Schachter says delivery is going to change radically from its current state, when Google is prime to take over with self-driving cars.
“If you have self driving cars, those self driving cars can go to the store for you and pick things up and bring them to your house,” Schachter says.
How’s that for delivery?
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