Target claims a 90% handling cost reduction for same day shipping options

An article in CNBC.com titled “Target CEO says cost of handling online orders drops 90% when shoppers use same-day options” claims that shipment from stores enables retail efficiency and decreases cost by 40% associated with from a distribution center. Those costs decrease by 90% when customers pick up online orders from the store or curbside. The benefit of satisfying demand from retail locations already close to the customer provides brick-and-mortar retailers a competitive edge over Amazon. How should Amazon adjust to compete with Target – build more distribution centers ? Increase their investment in robotics at their distribution centers ? Increase Amazon lockers for customer pickup close to their offices?

About aviyer2010

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This entry was posted in Capacity, competitiveness, Cost, Ecommerce, emb2021, Supply Chain Issues and tagged , , , , , . Bookmark the permalink.

1 Response to Target claims a 90% handling cost reduction for same day shipping options

  1. Ryan Ma says:

    Amazon isn’t completely caught off guard with its competitors like Target and Walmart. It does have Whole Foods and a vast amount of Amazon lockers throughout the United States. They have also worked with Kohl’s to handle any Amazon returns and market their smart home products. It would be interesting to see them acquiring more square footage in Kohl’s to display more products. That concept may eventually save Kohl’s retail market share. Amazon could also improve its edge by implementing more hub lockers in UPS locations since Fedex is not a viable option.

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