Retailers Are Warned to Step Slowly Into One-Day Shipping

Supply-chain experts say delivering as expected rather than sheer speed can matter most to online consumers

— 

Retailers anxiously watching Amazon.com Inc.’s one-day shipping push need to get a better handle on their inventory and true demand for super-speedy delivery before setting on a costly scramble to match the e-commerce giant, analysts and industry executives say.

Many retailers are chasing “same-day shipping when they have fundamental issues around where inventory is sitting in the supply chain,” Jim Barnes, chief executive of supply-chain software and consulting firm enVista, said at a supply-chain conference in Brooklyn, N.Y., this week.

Amazon’s plan to shorten the delivery window for members of its Prime program from two days to one is ratcheting up the pressure on competitors that are already spending millions to upgrade technology and reshape distribution networks as more shoppers buy items online.

The move announced last month is expected to boost overall e-commerce growth and drive additional investments as retailers race to catch up with Amazon’s formidable logistics operation, which includes hundreds of fulfillment, sortation and delivery centers.

The success of Amazon Prime has made two-day shipping the default expectation for many online shoppers. But as retailers battle for market share, being fast may not be as important as being clear about when orders will be delivered and then living up to those promises.

“A lot of ultrafast last-mile delivery solutions that consumers don’t even really ask for…ultimately are high-cost endeavors that don’t necessarily help a retailer’s bottom line,” Sucharita Kodali, an e-commerce analyst at Forrester Research Inc., said at the D3 Retail Supply Chain Summit in Brooklyn.