Overnight shipping is so last year. Today customers demand instant (or almost) gratification for their needs and desires and online-only companies like Amazon compete in the race to deliver products with companies like Walmart, which have both brick-and-mortar and online stores.
“What Walmart and eBay are working on is, can they be faster than Amazon,” said Matt Nemer, a San Francisco-based analyst at Wells Fargo. “It might not be the highest margin sale in the world, but they can potentially get something to you in an hour.”
Every Hour Counts
The competition to eliminate just a few extra shipping hours is heavy. To get deliveries to customers in under an hour, eBay Now dispatches college students by foot, bike and taxi to pick up products at brick-and-mortar stores and deliver them to people’s doorsteps. AmazonFresh recently started a same-day delivery service in the Seattle area as a pilot for what could eventually be a nationwide model, offering not only groceries but the full range of Amazon products.
As Amazon evolves into a same-day delivery service, its highly responsive transportation fleet could become yet another competitive advantage. By supplementing its long-term relationships with UPS and FedEx with its own Fresh trucks, Amazon may be able to deliver faster than retailers that depend entirely on outside services.
“Pretty soon, if you’re a retailer with your online business, you’re going to be faced with a choice,” said Brian Walker, a former Forrester Research analyst who is now with e-commerce software provider hybris. “You’re not going to be able to match Amazon, so you’re going to have to consider partnering with them and leveraging their network.”
Closing Supply Chain Gaps
Amazon is ramping up a warehouse building and buying spree, signaling the urgency of getting products to customers more quickly amid rising competition from eBay and Walmart. Amazon’s giant fulfillment centers could be another place where just-in-time manufacturing and delivery come together. Getting things from its warehouses to customers as quickly as possible also means restocking inventory — and replenishing inventory locally with 3D printers could result in significant savings for Amazon.
UPS will pick up the slack between Amazon warehouses and customers nationwide with its own 3D printers (eventually), as well as its extensive freight services network. By producing goods in exactly the ordered configuration precisely when they’re needed, 3-D printing is ideal for filling gaps in the supply chain (which reduces uncertainty), keeping inventory low more (which saves manufacturers money on shelving) and reducing waste (which occurs when the goods aren’t sold).
3-D Printers in Strip Malls
UPS is forging ahead of the competition to bring 3-D printing to the masses. It is the first nationwide retailer to test 3-D printing services in-store, the company recently announced. Select UPS locations across the U.S. will offer the services to start-ups, small businesses and retail customers, beginning in San Diego. Each store locations will be equipped to produce items like engineering parts, functional prototypes, acting props, architectural models, fixtures for cameras, lights and cables.
The Race is On
Who will win the race to instant? Will Amazon and UPS partner to create the ultimate supply chain? Will Jeff Bezos write a check for UPS and add their fleet of 100K delivery vehicles to the Amazon empire? After his acquisition of The Washington Post, anything is possible.
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