Is 2-Day Delivery Too Slow?

Great Expectations

Waiting for a package for three to five business days can feel excruciatingly long, especially as two-day delivery has become the norm with certain retailers.

We’ve been conditioned to expect shipments sooner, and expect lightning-fast deliveries, leading America’s retailers to overhaul their shipping processes to meet these expectations.

Shipping War

Amazon (AMZN), Walmart (WMT), and Target (TGT) are locked in a tight competition for shipping superiority. Years after its Prime program popularized 2-day delivery, Amazon remains the leader in this regard. But Target and Walmart are hoping new initiatives will help to close the gap.

Walmart is attempting to use automation in its warehouses to increase the speed of delivery to both stores and customers, and Target is also overhauling its warehouses to expedite shipping. But while these initiatives are intended to both speed up delivery and cut costs, they require massive overhead. Target alone has invested $100 million in augmenting its warehouses.

Meanwhile, Amazon’s new distribution model has packages arriving at Prime members’ doors faster than ever. It divides up the country into eight regions, making sure the customer’s orders are shipped from a warehouse located within their region.

Fierce Competition

The intense competition may raise costs for these retail titans in the short-term. But for consumers, more competition between retailers could prove positive, leading to better service, and in this case, better shipping conditions. Amazon is already increasingly offering same-day delivery.

At the same time, ultra-fast delivery also has an economic cost. Amazon gives buyers the option to receive fewer boxes by pooling deliveries, for example. But whether the desire for less paper recycling offsets wanting quicker deliveries remains to be seen.

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