This week both Walmart and Target announced they will expand more delivery choices including an expansion of free 2-Day delivery services.
Target said they are rolling out free 2-Day delivery without a minimum order requirement just in time for the holiday season. This is in addition to offering same day store pickup and low-cost same day delivery with Shipt.
Walmart has been offering many of the items it sells already with free 2-Day delivery, but the company said it is now working with third-party marketplace sellers to make millions of more products available on the program.
Starting in November, shoppers on Walmart.com that purchase products from many marketplace sellers will also receive free 2-Day delivery on orders over $35. And Walmart will also accept in-store returns on marketplace items at its 4,700 U.S. stores.
Both Walmart and Target are directly competing with Amazon and the retailers are making the case they do not require a membership to receive the free 2-Day delivery option.
Other large retailers such as Best Buy already offer free 2-Day delivery on many items. And this holiday season, shoppers should also expect retailers such as Macy’s, Kohl’s, and others to offer more expedited free delivery options.
It is hard to imagine that many of the free 2-Day delivery options will disappear after the holiday season as Amazon has no plans to make changes to its Prime service.
Free 2-Day Delivery – The New Normal
For small business online retailers the fight over faster delivery is unwelcome news.
Unlike large retailers that may have fulfillment warehouse spread all across the country, most small business retailers ship from one location.
Offering free 2-Day delivery can become very expensive if shipments have to be placed on expedited delivery services to make the delivery commitment.
For over a year now, eBay has been pushing sellers to offer more free 2-3 Day delivery services to compete better in the eCommerce space.
But many sellers have been reluctant or flat out dismissive about eBay’s methods to “force” the new “delivery normal” on them.
It is possible eBay in the U.S. may have to consider a model they are using in Australia where they offer a membership service and fulfillment services to jump start their stagnant GMV here.
As larger retailers join the free 2-Day delivery club, it will become more important for small online merchants to offer the same delivery service to stay competitive. But is that even possible?
Fulfillment Services to The Rescue?
For small business retailers that need to address this potential existential problem, the easiest solution may be to farm out fulfillment to a company that can strategically spread inventory across the nation.
Besides Amazon FBA, other options in this space include Selery Fulfillment, ShipBob, and Radial. Courier services such as FedEx, UPS, and DHL also offer fulfillment networks that can help reduce shipping times to customers.
Many of the fulfillment networks also offer other services that can help manage inventory, offer repackaging or re-branding services, and even customer service functions.
Depending on how a business sources or manufactures its products, the shipment volume, and the size and weight of shipments, fulfillment services could be a good fit. But it isn’t the magic bullet for all micro and small businesses.
For some small companies a hard look at their product mix may be the next best solution to deal with the new normal of 2-Day free delivery.
If a company offers too many products that are already available on Amazon, Walmart, or Target, then maybe moving to products that offer more unique styles, designs, or functions not found elsewhere may be a solution to differentiate from the crowd.
Shoppers may wait a little longer if the product offered is truly different and unique from the mass-merchandise offered by larger online retailers.
The growth of the Etsy marketplace over the last year seems to show that there is a desire by many shoppers for more unique products. Such a decision would likely reduce the total per unit sales which would have to be made up with a higher per unit cost.
Business owners may also want to remove heavy or bulky items and concentrate on smaller items that can be shipped with USPS Priority Mail. This could be another option to streamline operations and compete better with the larger online retailers that now are migrating to free 2-Day shipping services.
Free 2-Day Delivery is Here to Stay
Unfortunately, for most small businesses the reality is that free 2-Day delivery is the new normal and is here to stay.
Coming out of this holiday season it will be imperative that small business owners look at their fulfillment strategy and product mix to make decisions that will allow them to compete better in the marketplace.
Everyone knows there is no such thing as “free” 2-Day shipping, but marketing by large online retailers has changed consumers expectations.
Fast and free delivery is the norm today and it may require small merchants to make business strategy adjustments to stay competitive in the growing eCommerce market.
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