$491.5 billion is expected to be spent online by 2018 in the U.S. To this point one company, Amazon, has contributed most of the disruption. However, in May, two of the world’s largest brands joined the party.
The world’s largest retailer, with over 8,500 stores and $405 billion in annual revenue, recently announced the debut of ShippingPass. ShippingPass is Wal-Mart’s alternative to Amazon Prime. This annual subscription based shipping membership offers unlimited three-day delivery on items from WalMart.com for $50 a year. While Amazon Prime provides unlimited two-day shipping, it comes with an annual $99 price tag.
This is Wal-Mart’s first strategic effort to meet the consumer transition from price to value. They have already established the world’s largest footprint of brick and mortar, but consumer demands are now more focused on value and convenience versus the savings of low prices.
Google’s “Buy” Button
Nearly 68% of all internet searches are performed on Google. In addition to owning the search engine market, 96% of the Silicon Valley giant’s revenue is from advertising. However, in recent years, Amazon has become the preferred destination for shoppers. The Amazon platform offers price comparisons, reviews and a streamlined purchasing process, making it convenient to bypass the research that Google provides.
In an attempt to bolster their hold on search and enhance their positioning to capture a searcher’s desire to purchase, Google has implemented a “Buy” button. This functionality allows a searcher to make a purchase without having to travel to a third party site. In e-commerce, less is more when it comes to clicks. Adding additional windows, more steps for authentication and more time between the decision and the ability to purchase is a tremendous barrier. This streamlined approach will not only add value for Google’s advertisers, but create some disruption to Amazon’s e-commerce dominance.
Not one to be outdone, Amazon has launched same-day delivery in 14 U.S. cities.
These moves by some of the biggest companies in the world speak directly to the power and influence that consumers and technology have over the traditional ways of doing business. A transition from pricing to value and convenience is changing how retailers need to reach their customers. Of course this means a new host of logistical and fulfillment challenges. With no signs of slowing down, the e-commerce sector also has limitless opportunities. Barrett Distribution Centers, with a focus and commitment to technology as well as a depth of e-commerce experience, has developed customized supply chain solutions for all types of e-commerce operations. For more information, click here.