Consumers are increasingly favoring the perks of shopping online. A full 67% of US Millennials and 56% of Gen Xers prefer shopping online over in store. In an attempt to capture these online sales dollars and fend off Amazon, Department Store brands are upping their delivery game. According to L2’s Digital IQ Index: Department Stores, in the past year alone there have been double digit increases in the percentage of Department Store brands offering next-day shipping, scheduled delivery dates, and same-day shipping.
Sixty-nine percent of Department Store brands now offer next-day shipping, thirty-seven percent offer scheduled delivery dates, and the percentage of brands offering same-day shipping nearly doubled from fifteen percent last year to twenty-seven percent in 2016.
But it’s an uphill battle against Amazon, who captures over half of all e-commerce growth. The e-commerce giant continues to build a moat around its business by expanding its warehouse and delivery station footprint. And it has seen an exponential growth in reach over the past few years. In fact, 44% of the US population is now within 20 miles of an Amazon fulfillment center. That’s up from 26% in 2014 and just 7% in 2012.
Increasing proximity to consumers means lower shipping costs and shorter delivery times. With a bigger footprint, Amazon can offer it’s attractive same-day and same-hour delivery service to an increasingly wide consumer base. This is only likely to attract new Prime members – a community that is already 70 million strong—and further distance Amazon from the pack.
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