At the Ad Age Digital Conference in New York, Mark Mahaney, a Wall Street analyst known for his knowledge of Internet sector companies, shared the following data with the audience. This is the evolution of the average distance between Amazon fulfillment centres and the 50 largest cities in the United States.
Amazon deliberately situates its order deployment centres close to the majority of its consumers. But why do they bother when couriers like FedEx and UPS can deliver orders to virtually anywhere? What is Amazon’s interest in being closer to its customers? According to Mahoney, the next frontier of e-commerce is same-day delivery. He thinks that many consumers would pick online retailers over their brick-and-mortar competitors if they could have a same-day delivery guaranteed. In particular, Amazon is betting on groceries and clothing to fuel its growth in the American market over the next few years.
Any retailer with an online presence should anticipate this movement and start developing large-scale, same-day messenger services. This would allow all e-commerce sites, from big-box brands like Walmart to local shops, to remain competitive against Amazon.
Mark Mahaney’s presentation from AdAge Digital is available on Slideshare.
Read more from Jean Pascal at A Nos Vies Numériques.