Screen Shot 2015-05-28 at 2.44.01 PMAmazon has grown into the greatest force reshaping retail thanks to not only massive product selection and low prices but also superior fulfillment capabilities. The company has used cheap capital to fund unprecedented investment in last-mile services to guarantee free two-day delivery for Prime members and also offer same-day delivery in 14 U.S. markets. Now, further chipping away at the brick-and-mortar advantage of immediacy, Amazon is upping the ante with free same-day delivery for Prime members who order a minimum of $35 in eligible products. With Amazon’s Prime membership reaching an estimated 41 million, traditional retailers that aren’t making major omnichannel investments are at an increasingly severe disadvantage.

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Of the Big Box brands in the L2 Index, 22% offer same-day delivery, with 33% shipping directly from the vendor and 37% shipping from the store. Baking distribution center capabilities into local stores gives brick-and-mortar players a key advantage in competing against Amazon, and the 37% adoption rate suggests that ship-from-store is an emerging capability. It is also one of the hardest to execute. Sectors that have widely adopted this service are brands 
in Electronics, Sporting Goods and General Merchandise. Walmart, one of only four brands here that offer same-day shipping, ship-from-store and direct-from-vendor options, is reportedly planning a Prime-like service that will be cheaper to join ($50 a year). The company has said it plans to invest up to $1.5 billion on e-commerce this year.

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Among department stores, one-third of those in the L2 Index 
are offering same-day delivery in at least one market. These include Macy’s and Bloomingdale’s, which announced the rollout of same-day delivery in eight markets last September. The two retailers are among those turning to partnerships to service the core upscale urban millennial demographic willing to 
pay for immediate delivery; both have partnered with Deliv. For more on brands’ shipping and fulfillment capabilities, download L2’s Insight report.

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