Next-day and same-day delivery will take a knife to brick & mortar retail

Next-day and same-day delivery will take a knife to brick & mortar retail

“Retailers closed a record 102 million square feet of store space in 2017, then smashed that record in 2018 by closing another 155 million square feet, according to estimates by the commercial real-estate firm CoStar Group.”

And that’s before Amazon unveiled the shift in its Prime service to one-day from two-day shipping. In short order, we’ve seen both Walmart and Target join the one-day shipping ranks. In our view this will only add gas to the fire that is brick & mortar retail closures and it sets the stage for a painful second half of 2019. We’ll look for confirmation in the volume of truck and van deliveries that are likely to ensue as next-day and even same-day delivery gets those potential digital shoppers off the fence and joint in this  aspect of our Digital Lifestyle investing theme.

Target is among the latest merchants to boost its same-day delivery offerings. The retail chain is making same-day delivery though Shipt available to all of its shoppers. The retailer’s June 13 announcement shows Target is moving to compete with Amazon and Walmart in an ongoing bid to provide customers with the quickest delivery service.

Target said online customers in 47 states can now get items delivered on the same day for a flat fee of $9.99 per order. Target acquired Shipt in 2017 for $550 million. Previously, Target customers could get same-day delivery by being a Shipt member, for $99 a year. That’s still an option, but now customers can also get one-day delivery for just one order.

Not to be undone, Walmart recently said it is expanding its next-day delivery service before the start of the back-to-school shopping season. The retailer is opening up the service to a dozen new states, including in parts of Florida, Georgia, Illinois and Wisconsin. It originally launched in May for customers in Phoenix, Las Vegas and Southern California, and Walmart previously revealed it wants to reach about three-quarters of the U.S. by the end of the year.

Walmart’s next-day delivery is available for customers who spend $35 or more. Orders are shipped in one box to address complaints from customers about receiving multiple boxes.

Source: Same-Day Delivery Wars Heat Up | PYMNTS.com

Amazon Reportedly Has Obtained Pharmaceutical Wholesaler Licenses In 12 States 

Amazon Reportedly Has Obtained Pharmaceutical Wholesaler Licenses In 12 States 

We have seen the creative destruction that Amazon has unleashed on the world of retail and now we are seeing it occur in food & grocery, and soon apparel. Even as Amazon expands its footprint in these markets, it is laying the groundwork for another move into pharmaceuticals. We see Amazon’s underlying logistics business that offers same-day, next day or two-day delivery as a compelling alternative to picking subscriptions up from CVS Health, Rite-Aid, Walgreens, Walmart, the local grocery store, such as Kroger and Albertsons, or even from other online vendors.

In 2015, pharmacy and drug store sales amounted to approximately $263.47 billion with CVS Health was the second leading drug store chain in the United States, generating about 153.3 billion U.S. dollars as a corporation; about 52.5 billion U.S. dollars of that total was generated solely by Rx sales.

Should Amazon continue down this path, it will be interesting to see how CVS Health, Walgreens, Costco Wholesale, Sam’s Club and other companies that sell pharmaceuticals respond. Odds are it will be a painful battle that leads to market share loss, and pressure on sales, profits, and EPS as the reach of the Connected Society expands one step further.

 

The St. Louis Post-Dispatch reports that Amazon has become a licensed pharmaceutical wholesaler in 12 states, with a pending application in a thirteenth. To ship drugs directly to consumers, competing with large pharmacy benefit managers and mail-order pharmacies like Caremark or Express Scripts, Amazon would also need to be licensed as a pharmacy in each state to which it shipped drugs.The facilities listed on the applications are distribution centers in Indiana. One industry analyst observed to the Post-Dispatch that Amazon may be building its own pharmacy capabilities, or could acquire an existing pharmacy, as it did when it acquired Whole Foods to bolster the grocery business that it had been building for years.The Post-Dispatch was able to confirm through public records that Amazon has been approved as a pharmaceutical wholesaler in the states of Alabama, Arizona, Connecticut, Idaho, Louisiana, Michigan, Nevada, New Hampshire, New Jersey, North Dakota, Oregon, and Tennessee. An application in Maine is still pending.

Source: Amazon Has Obtained Pharmaceutical Wholesaler Licenses In 12 States – Consumerist