Amazon’s dominance of the retail scene is under growing pressures from most of the other retail behemoths and an epic war between the retail stars is underway.
Last week, I noticed on Costco’s web site that they were now offering same day delivery to my South Florida home. Saturday morning I tried them out:
- At 9:50h, I hit “Grocery by Instacart†at the very end of the Costco app.
- After entering my zip code, I was shown delivery time options for the day. I chose the earliest 11:00-12:00h slot.
- I ordered 2 dozen Premium roses at $21.49 plus other sundry items to reach the $35 minimum order for free delivery.
- After accepting my order, Costco asked for special instruction for the picker. I asked for 1 dozen of red roses and 1 dozen white.
- The app kept me up to date throughout the picking and delivery process, much like uber.
- At 11:20h, a text message told me that my order would arrive at 11:40h. I was able to follow the driver on a map. I could have texted her if needed.
- At 11:40h, a young girl arrived in a rundown car filled with orders, delivered the goods and went on to her next client.
- Soon after, the app prompted me, asking if I wanted to give a tip to the picking and shipping team, closed my bill and debited my credit card.
- Finally, it asked me to rate my experience and the driver à la uber.
In all, a truly easy and efficient process that took less than 2 hours from order to delivery on a Saturday morning.
This is not totally free. Had I made the trip to Costco, I would have saved $2.81 (6.7%) on the goods plus the tip. But I would have wasted 1 hour and some gas. I will buy such efficient convenience all the time.
Consider that Costco is now capable to deliver perishables within a few hours at a very competitive cost. You can order their meaty and highly popular Rotisserie chicken for $6.49 ($5.00 at the warehouse!) with frozen fries ($8.49/6 lb bag) and a large salad for dinner ordering in the afternoon.
And if you are in no rush, Costco will deliver a large assortment of non-perishables within 2 days.
FYI, sending 2 dozens of mixed roses through FTD.com would cost, after a $20.00 rebate that particular day, $62.04 with delivery in 2 days.
Don’t care much for Costco and its large quantities?
Google notified me last week that Google Express is now available in my area. Through the Google Express app, we can order all kinds of goods and stuff from a large array of retailers (Walmart, Target, Walgreens, Home Depot, Bed Bath and Beyond, etc.), always using the same Google Express account info, with free delivery on minimum orders within 2-3 days and no membership fee.
I did not experiment with GE but I can only see that the retail giants, and some not so big (e.g. L’Occitane, Pier One, Sur la Table,Kohl’s) are getting organized and efficient to fight Amazon.
Amazon is no longer the only game in town.
Last week, perhaps untimely:
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Those of you paying for Prime month to month will see a higher fee of $12.99. Annual fees will remain the same.
Raymond James and Associates analysts conduct regular grocery price comparisons. Here’s what they found as of January 12, 2018:
The price for the January same like-for-like branded basket of 35 items at Walmart was $121.85, $24.62 cheaper than the $146.47 basket at Amazon [Prime Now]. Since we began this portion of our pricing study, the Walmart basket has been cheaper 17 out 20 months. Of the 35 items in this month’s basket, Amazon Prime Now was lower priced on only one item, while Walmart was cheaper on 33 items and the price was the same on one item.
Amazon is thus 20.2% more expensive than Walmart this month, from +16.3% in December and +15.4% in November. RJ calculates that since May 2016, the median price gap was +11.8%.
This is a HUGE (and growing) difference that ought to have an impact, sooner than later. And now Costco is seriously getting involved in the war.
The Amazon Empire is under attack by the Rebels which now believe the Force is with them.
This is the beginning of Episode 2, The Force Awakens. The disruptor is getting disrupted.
No doubt there will be a sequel: The Empire Strikes Back, in which the star will not be profit margins.
There will be blood!
Meanwhile, Amazon Go is opening today in Seattle. Reuters has a short video. More links:
1 thought on “THE RETAIL STARS WAR”
I have been using Walmart more and more: web site and repeat orders simpler…and Cheaper. AMZN has raised various one order prices (for me, think Kind Bars) while offering them for less if you sign up for Prime Pantry. Walmarts price is the same as Pantry’s but 6% less than the “new” non pantry price…without all the clutter and endless data to tempt you to buy something else……AMZN holders beware, especially if cloud pricing/margins come under pressure.
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