A Last WORD: A RETAIL SOLUTION (PART 2 OF 2)
In yesterday’s “last word“, I highlighted the increasing probability of a retail recession due to the continuing failure of second tier department stores (J.C. Penney, Dillard’s, Kohl’s) and the uptick in failure at premier department stores like Macy’s, Nordstrom, and Bloomingdales. Details of current stock turmoil can be found at “Retail Gets Downright Ugly“
via Business Insider:
When Postmates first launched in 2011, food orders were 99% of the company’s deliveries. And now, that share has shrunk down to 80% where the other 20% is made up by delivery orders for retail, health, and beauty products. This is likely driven by another large partnership Postmates sealed last month with American Apparel. It is the first in-app partner to offer apparel, and is also the largest partnership that Postmates has landed as of yet.
Postmates retail push is helping appease consumers that are increasingly expecting faster delivery — 99% of US consumers consider same- or next-day delivery to be fast, according to Deloitte. Meanwhile, just 63% consider 3-4 day shipping to be fast. This means that for on-demand startups like Postmates, retail provides a valuable market for gaining new customers quickly.
There’s potential in a major retail partnership between retailers and logistics apps like Postmates. The prerequisite for this type of partnership will be the invest in omnichannel inventory tracking systems to replace legacy systems that currently hinder regionally-based eCommerce operations. This will allow users to purchase products from the likes of Macy’s, Nordstrom, and Bloomingdale’s through the Postmates app – having them delivered within the hour from the closest store that possesses the relevant product.
This provides a logistical structure for the type of instant gratification that Amazon has introduced to American consumers. It also transforms existing storefronts into working warehouses, allowing for the reduction of off-season, in-store personnel.
Nordstrom’s anticipated $300M investment in eCommerce in FY16 is the most capable of accomplishing this type of pivot. At scale, this reimagining of local eCommerce can work and even inch the odds in the favor of legacy stores – at least until Amazon’s drones are ready for flight.
See more of the issue here.