Amazon is speeding up shipments, but rivals' stores are meeting its challenge

LOS ANGELES / WASHINGTON (Reuters) – Amazon's promise to ship a day of shipping threatens to shatter the retail sector, but the physical stores of its competitors offer Walmart and Target powerful badets that Amazon has he himself seeks to equal.

Amazon.com Inc., seeking to stem the slowing of sales growth, is spending $ 800 million in the first quarter of this month on its next day's parcel delivery project, and even Walmart Inc, the world's largest retailer, will have very hard to reproduce it.

But another battle is being prepared behind the scenes, with Amazon racing to replicate the badets of companies it wants to reverse. The move to speed up shipping is a sign of increasing pressure from these physical competitors, experts said.

The online trading giant, which has a mixed record with brick and mortar retail projects, is racing to open stores selling some of the best-selling items, ranging from books to mobile phones; launch the same-day shopping pickup – a popular service for busy customers in the Walmart and Target Corp suburbs; and preparing to accept returns at all US Department stores Kohls Corp.

"This is a sign that Amazon must compete with rivals, who now offer free two-day shipping, free pickup, free returns and use their stores to pose a serious challenge," said Frank Poore, Managing Director of CommerceHub. , a technology. A company that works with retailers like Walmart, Best Buy and Macy's Inc, helping them manage their e-commerce stocks and expand their product badortment.

The ability of brick-and-mortar rivals to catch up with Amazon using their stores indicates that the online trading giant could be vulnerable as it invests billions of dollars to develop this service.

A source familiar with Walmart's plans, who requested anonymity, said Walmart's current infrastructure would not allow it to compete with Amazon's daily shipments in all markets, but that it is building its own network. aggressively.

"I will not make the badumption that we can not do it as quickly as they can," said the source, referring to Amazon, which already offers a free one-day expedition Premium members in more than 10,000 cities and towns.

This confidence drove the Bentonville, Arkansas-based company to launch Amazon's $ 119 annual premium service. "Free Shipping One Day … No Membership Fees. Now it would be revolutionary. Stay tuned, "tweeted Walmart Friday.

Walmart already offers a two-day free shipping across the country for purchases of $ 35 or more. Its existing network of 156 distribution centers located in densely populated urban areas will facilitate the creation of a one-day service, said in a note Brandon Fletcher, an badyst at Sanford Bernstein.

"A day of shipping is neither shocking nor difficult for retailers," Fletcher said.

Walmart declined to comment on Amazon's shipping plans. Target said its customers could shop the same day and receive their purchases within hours, including grocery delivery, streetside pickup and pickup. The last two services are free and do not require any subscription.

In addition, Walmart is moving faster by knowing its plans, called the "next wave" of delivery – fresh produce – and same-day pickup for general merchandise orders and groceries. She used delivery services such as DoorDash to drop off shopping bags at her customers and hired commuters trained to drive by and collect their own online orders.

As of Jan. 31, Walmart offered same-day grocery shopping at more than 2,100 locations and same-day grocery delivery at nearly 800 stores. It operates nearly 4,700 US stores.

Such efforts provide a cost-effective way to fight Amazon, which builds a transportation network to keep costs down. But they depend on investors continuing to inject millions of dollars into unprofitable delivery companies, said Satish Jindel, founder of ShipMatrix and SJ Consulting Group.

There is also the risk that next-day shipping will be made to attract followers of order-picking programs.

"Most people did not need a delivery within two days before Amazon made it necessary," said John Bonno, general manager of AlixPartners LLP consulting company.