Has Amazon Pushed the Competitive Bar Higher?
Until now, the biggest weapon brick-and-mortar retailers have had in their arsenal in the fight against Internet giants like Amazon (NASDAQ:AMZN) was their ability to satisfy customers’ needs and wants with an immediacy that Internet competitors just couldn’t. But they may not be the sole proprietors of immediate gratification for long. Amazon has hinted since September that the company might harness its retail business to expand its same-day delivery service.
The possibility that Amazon could make its retail business even more competitive has prompted companies from Wal-Mart (NYSE:WMT) to Google (NASDAQ:GOOG) to eBay (NASDAQ:EBAY) to launch services of their own. While same-day shipping may be unprofitable, logistically difficult, and beyond customers’ needs, their fear of Amazon has made the service a necessity.
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How is the same-day delivery service battle progressing?
Amazon is notoriously coy about its business ambitions. However, after Jeff Bezos confirmed in early September that the Internet retailer’s expanding warehouse network would reduce delivery times for online shoppers, speculation that Amazon was heading closer to announcing a same-day shipping service grew. Although analysts have said that service could secure the company’s dominance in the industry for the next decade, they have also cautioned that the costs of new warehouses could bring years of low profits. Since 2009, Amazon has offered a same-day service, but so far it has been limited to customers who lived in close proximity to its warehouses, bought only certain items, and placed orders in the morning…