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Increased Shipping Speeds in American Retail

NEW YORK — HavenÔÇÖt ordered any of your holiday gifts yet? Well, you might find solace in discovering some of AmericaÔÇÖs biggest retailers are working to increase their shipping speeds to please shoppers expecting faster and faster deliveries.

Walmart, Target and Amazon are all-in on the shipping wars, a move retail experts say will help them maintain a competitive edge against low-cost Chinese retailers Shein and Temu. For Walmart and Target, their investments are also aimed at narrowing the gap in delivery speed with Amazon, which has set the standard for fast shipping and remains the king of speed.

Amazon packages have been arriving at the doors of Prime customers even faster this year under the companyÔÇÖs new distribution model, which divides the country into eight regions and predominantly ships items from warehouses in those areas. The idea, according to Amazon, is to get shipments to travel shorter distances with fewer touchpoints, which helps the company not only speed up deliveries but also cuts down on costs.

Previously, the Seattle-based e-commerce giant used to fulfill orders from warehouses across the country. In July, it said 76% of customer orders were being fulfilled within their region, up from 62% before the change.

ÔÇ£We remain on pace to deliver the fastest delivery speeds for Prime customers in our 29-year history,ÔÇØ Amazon CEO Andy Jassy said in October during an earnings call with analysts.

Company executives have noted faster shipping is also being driven by AmazonÔÇÖs expansion of same-day delivery, which was first rolled out in 2015 to Prime members who currently pay $139 a year for free two-day shipping and other perks. Same-day delivery sites are smaller warehouses that are located in metro areas and predominantly store the top 100,000 products customers want. Amazon Vice President of Delivery Experience Sarah Mathew said the company currently has 55 of these sites in the country. And it has plans to double the number in the coming years.

ÔÇ£Psychologically, fast delivery is very important to the consumer when ordering online,ÔÇØ said Neil Saunders, managing director of GlobalData Retail. ÔÇ£That is why everyone is trying to push out more into this space even though itÔÇÖs very expensive to support and it often requires a lot of new infrastructure.ÔÇØ

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