Industrial Engineering

Chasing Amazon is Expensive

https://media.defense.gov/2003/Feb/10/2000030741/-1/-1/0/030129-O-9999J-004.JPG
ISE Magazine – Volume 49, Number 4

An overwhelming number of retailers are losing money chasing Amazon. The brick-and-mortar stores are offering tighter delivery windows, the option of picking up digital orders in the store and not making a profit. Just 10 percent of the 350 global retailers surveyed said they made money fulfilling such orders.

To combat the losses, 62 percent told JDA they plan to raise the minimum spending requirement for free standard home delivery and 55 percent will raise the minimum order required for in-store pickup. Some will decrease in areas that are too expensive, especially same-day delivery.

Customer expectation for things like free shipping and free returns have pushed U.S. retailers away from charging for these services. In fact, Wal-Mart recently lowered its minimum order for free shipping from $50 to $35. Amazon then trimmed its minimum order from $49 to $35 for those who don’t subscribe to its Prime service.