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IPFS News Link • Cyberspace and the New Economy

Amazon's one-day shipping sets off new holiday retail war

• CNet

Game 7 of the World Series was a few hours away when Fanatics tech chief Matt Madrigal met me in the Manhattan office of his sports-gear company. His voice was filled with excitement as he talked about an expected surge in customer sales that late October day after the new champion won -- he just wasn't yet sure which team it would be.

"It is truly the most unpredictable business," he said about selling sports apparel, mentioning how players can reach celebrity status in seconds thanks to one clutch play. And fans aren't patient about wanting this new stuff. "You want it now," Madrigal added.

Madrigal's job of fulfilling digital shoppers' demands will get tougher this holiday season, with the two biggest names in retail, Amazon and Walmart, both diving headlong into one-day online delivery. Walmart's service is free for orders over $35 and Amazon's comes at no additional costs for its Prime members, who pay $119 annually.

I interviewed five e-commerce executives, including Madrigal, about this trend to next-day shipping and how it'll impact their holiday sales. Most acknowledged it'll make things harder for them, since their customers may come to expect such speedy deliveries. At the same time, they outlined several strategies they hope will help them survive against the two juggernauts of shopping and keep us shoppers coming back, even if we have to wait a little longer to get our stuff.

One-day shipping, by the way, isn't something smaller players can easily replicate, since it typically requires a whole lot of well-stocked warehouses placed strategically across the country to pull off these fast shipping times. Fanatics operates 10 warehouses in the US, and the other execs I talked to run one to three warehouses, compared with Amazon's network of over 400 US delivery locations.


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