New Articles

FEDEX, UPS, & AMAZON SCRAMBLING IN THE AIR FOR FAST, FREE SHIPPING

FedEx

FEDEX, UPS, & AMAZON SCRAMBLING IN THE AIR FOR FAST, FREE SHIPPING

Christmas came in May for Amazon Prime subscribers, who were informed the platform’s tens of millions of items would be available for free same-day delivery and two-day shipping. 

“Prime Free One-Day is possible because we’ve been building our network for over 20 years,” reads a company statement. “This allows Amazon to work smarter based on decades of process improvement and innovation, and to deliver orders faster and more efficiently.” 

Customers reap the benefits as Rakuten Intelligence research shows that over the past two years, the time from purchase to delivery has been slashed from 5.2 days to 4.3 days on average. And yet, Amazon is faster still, at 3.2 days.

Other retailers took the Amazon news like a lump of coal, with Walmart scrambling to unveil free one-day shipping without a membership fee. Target already had such a program for card-carrying loyalty shoppers. FedEx revealed it was parting ways with Amazon for “strategic reasons.”

Meanwhile, industry watchers caution about the hidden baggage that comes with rapidly delivered packages.

Competition is Fierce

Despite the cheery one-day news, Amazon still faces competition from Walmart, which boasts more than 4,700 store locations and an extensive network of warehouses from which it can deliver packages. Another worthy contender is XPO Logistics, which is among the largest third-party logistics providers with 90 facilities across the country. 

During his December earnings call, FedEx CEO and founder Fred Smith said his company views Amazon “as a wonderful company and service and they’re a good customer of ours. We don’t see them as a peer competitor at this point in time.” 

Mere months later, FedEx severed ties with Amazon and partnered with Dollar General on package delivery services, with expectations to offer the service in more than 1,500 stores by late in the summer, building to over 8,000 stores by 2020. 

“We believe this move is an attempt to increase delivery density in lower population areas,” states the Morgan Stanley Research on the move. “… The Dollar General partnership follows a series of headlines including FDX’s AMZN customer loss, move to seven-day ground delivery, and incentive compensation modification ahead of their June 25th fourth quarter earnings release.

So much for not seeing Amazon as competition. FedEx’s annual report, which was released on July 16, mentioned Amazon six times and included this context: “We face intense competition.”

“[I]f customers, such as Amazon.com, further develop or expand internal capabilities for the services we provide, it will reduce our revenue and could negatively impact our financial condition and results of operations,” the FedEx report states. “News regarding such developments or expansions could also negatively impact the price of our common stock.”

And how is this for sounding completely opposite to what Smith had said just seven months prior? “[S]ome high volume package shippers, such as Amazon.com, are developing and implementing in-house delivery capabilities and utilizing independent contractors for deliveries, and may be considered competitors.”

Look! Up in the Sky!!

“Amazon.com is investing significant capital to establish a network of hubs, aircraft and vehicles,” the FedEx annual report notes.

That’s striking when you consider the far fewer times FedEx rival UPS is mentioned in the same report. Keep in mind that UPS currently has 564 cargo jets and thousands of facilities and fulfillment centers around the world, while Amazon has one air hub and options on 100 planes—by 2021, according to a June announcement. 

Ditching Amazon as an air customer led to FedEx slashing prices to fill its planes, according to numerous reports.

As the shipping giants fight for the skies, benefits are being reaped on the ground. Hillwood, developer of the 26,000-acre master-planned AllianceTexas development near Fort Worth, announced in June it has acquired control of 600 acres of additional contiguous land. Strategically located between Fort Worth Alliance Airport and the BNSF Railway Alliance Intermodal Facility, the new Alliance Westport property increases Hillwood’s potential for more manufacturing, large-scale logistics facilities and aviation sites adjacent to the airport’s recently expanded runways.

Alliance Westport is already home to more than 8 million square feet of industrial and aviation development, including key logistics facilities for UPS, FedEx and Amazon Air. When combined with BNSF Railway’s intermodal facility volumes, these three hubs will offer Alliance Westport customers unparalleled access to rail, highway and air shipping options, all within a one-mile radius. The railway and roads have direct routes to Mexico and expedited transit times to the West Coast ports of Los Angeles and Long Beach.

“This is one of the most significant land acquisitions in the history of AllianceTexas,” says Tony Creme, senior vice president of Hillwood. “As Alliance Airport and the BNSF Railway Alliance Intermodal Facility continue to expand and strengthen the foundation for AllianceTexas’ commercial growth, this new property in Alliance Westport will serve as a strategic link between these two pieces of critical logistics infrastructure and offer unparalleled connectivity to our customers.”

 But What About the Planet?

As efforts intensify to move products faster, speedy deliveries are taking a toll on the environment, according to Patrick Browne, director of Global Sustainability at UPS

“The time in transit has a direct relationship to the environmental impact,” Browne told CNN Business on July 15. “I don’t think the average consumer understands the environmental impact of having something tomorrow versus two days from now. The more time you give me, the more efficient I can be.”

A van schlepping goods to e-commerce customer doors does remove from the road the vehicles of those who would otherwise be driving to brick and mortar stores, but a 2012 University of Washington story found that advantage is erased if the delivery route begins far away and items are coming immediately, because the ability to lump orders together is diminished. 

Last-mile services such as Amazon Flex and Walmart’s Spark Delivery often deliver only a few items at once in personal vehicles or small vans. A new option called Amazon Day, which offers discounts and rewards to customers who choose “no-rush shipping,” does allow for the consolidation of orders, however.

Amazon’s competition can take solace in the fact that Amazon was already absorbing added costs for fast deliveries before the Prime one-day announcement, which included news of an additional $800 million investment in logistics infrastructure.

SUPPLY CHAIN IMS: WHY IT MATTERS AND WHAT TO EXPECT IN 2019

One of the many trends to keep an eye open for in 2019 is an increase and universal adoption of advanced Inventory Management Systems for supply chain management optimization efforts. These systems go beyond tracking incoming and outgoing inventory, providing turnover rates, monitoring trends for surplus and even predicting consumer behaviors. These factors go a long way for businesses, especially with shifts within an unpredictable market.

Big league industry players such as Wal-Mart and Nordstrom are strong examples of how advanced IMSs are automating supply chain management and ultimately reducing costs typically invested in a traditional business model. These companies integrate advanced IMSs to manage inventory at the vendor level. This system not only reduces the need for additional employees but holds the vendor accountable for inventory tracking from start to finish.

IMS Logistics Solutions identifies key factors impacting modern supply chain management success:

-Incomplete, inaccurate, and untimely data from providers

-Miscommunication and  lack of collaboration between transportation & logistics providers

-Visibility issues throughout the import/export process

Industry players should have already started considering integration of such advanced systems into their business model, as more competitors are expected to double-up efforts with IMS-led initiatives. To stay strong in the game, companies must keep up with automation trends. From predictive consumer interactions to increased efficiencies, businesses are equipped to create new records while reducing risks overall. It’s a multidimensional solution.

Source: IMS Logistics Solutions

Small Retail Business? No problem.

It’s the holiday season and consumer demands are keeping small and large retailers up at night. For smaller retailers, the concern is how to keep up and maintain the course against their much larger competitors. Unfortunately, many get stuck with a quick fix approach with minimal results, specifically with SEO optimizations and keyword traps.

Director of Elemental Search Limited, George Weir, provides some insight on how to leverage a demanding market without wasting time on result-less outcomes, specifically for smaller retailers such as mom-and-pop businesses.

“If you’re a small or medium sized toy retailer, it’s going to be difficult to compete with the big companies like Walmart and Amazon because they can afford to pour more resource, time and money into optimizing their website assets,” Weir commented. “It’s a classic case of David and Goliath, so pick your stones and ready your sling.”

Weir provides three critical pieces of advice: Go niche with your keyword phrases, create more content-rich web pages, and plan ahead. Seems simple enough? As simple as it may seem, these elements can make or break your results for this and next year. When done the right way, sales can soar.

“Building a database of your customers for next Christmas is a no-brainer. Added to that, capture information about the ages of their children so that when those children are a year older come Christmas 2019, you can be more targeted with your marketing,” he adds.

“Point-of-sale software like Vend make this a no-brainer. The information is incredibly easy to capture and few customers ever decline, particularly if you’re offering incentives such as discounts or lucky prize draws,” he said. If Amazon or Walmart offer a link to your website from their homepage, take it.”

Source: EIN Presswire 

 

When it Comes to Mobile Payments, an Omnichannel Strategy is Best

It’s been four years since Apple launched Apple Pay, which together with Google Pay and Samsung Pay have ushered in the modern era of mobile payments. These “pays” have been joined by mobile payment solutions from retailers like Starbucks and Walmart, and together with P2P apps that can be used at the point of sale like Venmo and Square’s Cash App, mobile payments in 2018 are increasing market share.

With merchant acceptance of EMV chip cards now at about 2/3 of retail locations and growing quickly, card networks and issuers are focused on increasing contactless card issuance and merchant acceptance of contactless transactions.  ETA projects that tens of millions of contactless cards will be in the U.S. market this year, and that number will increase significantly in 2019.  And merchants should encourage their customers to try contactless because of the immediate benefits:  faster check-out times, more secure transactions, and more connections to data-driven offerings.

For merchants to reap the full benefits of the modern mobile payments ecosystem, their payments strategy can go beyond accepting a contactless tap-and-go card and encourage use of smartphone payments at the point-of-sale. The true value of mobile payments comes from the marketing value of an omnichannel approach.  Take mobile order-ahead as an example. Six in ten American consumers between 25-34 years of age have used a restaurant or coffee shop mobile order-ahead service, and two in three Americans report choosing a restaurant specifically because it offers order-ahead. These services are growing quickly, and merchants that accept order-ahead mobile payments can engage new customers searching for dining options via their smartphones.

Mobile payments also offer a great opportunity for merchants to boost loyalty programs and discounts. Ninety percent of American consumers participate in rewards programs, and through easy integrations consumers can stack up rewards and discounts directly in their payment apps. Look no further than the success of Starbucks, Walmart and Walgreens with rewards programs and coupons built into their mobile apps and OEM mobile wallets. Mobile rewards programs are a proven marketing tool, and payments service providers are investing billions into making them easy and accessible for merchants of all sizes.

Ultimately, consumers care most about two things: saving time and saving money. A mobile payments strategy that embraces omnichannel acceptance – capturing customers whether they are order-ahead lovers, rewards program loyalists, or mobile wallet lovers – gives merchants tech-forward tools to tap into a growing market. Ultimately, it will be critical for merchants to build their presence in an increasingly digital marketplace.

 

Bio:

Jason Oxman is CEO of the Electronic Transactions Association – the global trade association now represents more than 500 financial and technology companies, making commerce possible by processing more than $6 trillion in purchases in the U.S. For more information about payment trends or the payments industry, visit www.electran.org.