For many years, product delivery was considered a relatively unexciting part of retailing. Marketers working in the retail industry often gave short shrift to delivering orders to their customers, preferring to focus their efforts on more exciting decisions, such as store design, product selection and promotion.
But in today’s retail environment, where competition can be brutal and profit margins thin, enhancing product delivery is now being viewed as a critical strategic decision. And at the forefront of changing how customers obtain products is Amazon.
While we previously noted how Amazon is testing drones that may someday be buzzing around cities delivering goods, there is another delivery innovation that we may see in the very near future. According to this Fortune story, Amazon is currently recruiting private drivers to help test local package delivery using the “on-demand” delivery service model made popular by ride-hailing services Uber and Lyft. Amazon now uses private drivers to deliver products as part of its Amazon Flex program, but while Amazon Flex only delivers a limited number of common household products, it is believed the new delivery method is intended to be much broader.
As with the ride-hailing services, technology, in particular mobile technology and GPS, is the key to making this a viable delivery option. The integration of these technologies offers the potential to change home delivery in terms of increased speed, lower overall cost and greater customer satisfaction. What is even more interesting, is that delivery could be 24 hours a day. That alone could reshape product distribution.
However, if successful, expect Amazon’s delivery idea to attract a slew of competitors. It would seem any major retailer would be able to offer the same service. And if they cannot offer it themselves, they can contract with other high-tech delivery services to deliver for them. In fact, as we noted last October, Uber is already testing package delivery using drivers that belong to their service. So it would not be very surprising to see this delivery model ramp up quite rapidly.
Image by paulswansen