Retailers Prioritize Fast Delivery

Major retailers, including Target, Kroger, and Walmart, are employing the same omnichannel strategy: fulfill deliveries more quickly, reports CNBC.

With same-day deliveries, these grocers are trying to outmatch each other on convenience while also leveraging their brick-and-mortar stores as an advantage over pure ecommerce market leaders like Amazon, said Michael Baker, an analyst at D.A. Davidson.

“This, over the last few years, has completely flipped the switch and turned stores into an asset,” he said.

This week, Target announced a paid membership program with free same-day home delivery and Walmart debuted Express On-Demand Early Morning Delivery which allows customers to order delivery in one hour or less beginning at 6 a.m.

Kroger said Thursday that home deliveries helped facilitate a more than 10 percent year-over-year growth in digital sales. The grocer offers a paid membership option for free two-hour delivery.

Membership programs help offset delivery and shipping costs by charging fees, while also allowing retailers to collect more customer data that can be used to personalize offers or support their growing advertising businesses, Baker said.

On a call with investors on Thursday, Kroger CEO Rodney McMullen described digital as “an important growth accelerator,” and said the company expects another year of double-digit sales growth. He said digital delivered more than $12 billion in sales for 2023.

Each retailer’s investment in retail serves a different purpose, notes the report. For Target, same-day deliveries help to boost sales; on the other hand, for Walmart, the added service helps the retailer deliver convenience while trying to retain higher-income shoppers, according to the report. Full Story