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Is Delivery Time the New Paradigm in the Retail War?

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Walmart, Inc. WMT, which had purchased Jet.com for $3 billion in 2016, relaunched the site on Sep 13 with additional features. Jet.com will now cater more to shoppers in metro cities like New York and offered products that will be tailor based, more importantly with three-hour delivery facilities. Understandably, with this move, Walmart will be taking the challenge to Amazon.com, Inc.’s AMZN Amazon Prime Now, which offers same-day grocery delivery.

The retail war is heating up with an increasing number of players shifting focus toward minimum delivery time. Almost all retail giants are pumping in more money and are either acquiring or partnering with delivery service companies for same-day delivery to stay ahead in the race.

Walmart Takes the Challenge to Rivals


Two years after acquiring Jet.com, Walmart has decided to redesign and relaunch the site with more local products, with a more personalized touch. However, the more important thing is it promises faster delivery. Jet.com will be rolling out its service in New York that takes into account zip codes and suggests items based on previous purchases, but more importantly faster delivery. Jet.com is offering three-hour same-day and next-day delivery for a fee. Reportedly, Walmart has plans to rollout this service to other cities too.

Much like Amazon, Jet.com will use its fulfillment center in Bronx that opens this year to help with the rollout. It goes without saying that almost all big retailers are focusing on the same-day delivery quotient at a time when the retail landscape is fast changing. Amazon has a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Walmart already has a same-day delivery service, which it is fast expanding. The company’s decision to relaunch Jet.com definitely is in a move to take the challenge to Amazon-owned Whole Foods, Target Corporation TGT and The Kroger Co. KR, which have been increasingly focusing on same-day delivery.

Focus Shifts to Minimum Delivery Time

The retail ballgame has changed in the last few years, thanks to Amazon, which has been setting new benchmarks. The e-commerce behemoth set the ball rolling by playing to its strength — a strong delivery wing — when it started offering a free two-hour delivery service from Whole Food stores to its Prime members in February.

The move came within a year of the e-commerce giant’s $13.7-billion acquisition of supermarket chain Whole Foods that stocks a wide range of fresh produce, meat, seafood, flowers and other items. And the company is aggressively extending its same-day delivery services to other cities.

This definitely has made other retails thin on similar lines to stay abreast in the race. On Aug 1, Kroger launched Kroger Ship in four markets — Cincinnati, Houston, Nashville and Louisville — and has plans of expanding its services over the next few months. The company already has a delivery service, Kroger Delivery, in partnership with Instacart, which offers two-hour delivery from local stores.

Target too isn’t lagging in the race. In March, Target and Shipt, which it acquired for $550 billion in December 2017, started same-day delivery of more than 55,000 groceries and home goods, toys, electronics and other products in Baltimore and Washington. In fact, Target has set a goal of making available the Shift service in majority of its stores in more than 40 states before Christmas 2018.

Per a report from research firm IGD, the U.S. grocery retail market is expected to reach $1.7 trillion by 2022 at a CAGR of 3.6% between 2017 and 2022. Moreover, the report suggests that online grocery shopping is expected to hit $20 billion by 2022 by registering growth of 18.1% over the same time frame, making it the fastest-growing segment. Naturally, this has made an increasing number of retailers to shift their focus to same-day delivery.

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