Monthly Archives: March 2016

Nordstrom Forecasts 30% Online Growth, Yet How To Cut Delivery Costs

online shopping

online shopping

What makes online retail a gold mine is that it’s limited only by the innovation of the retailers themselves.  It is companies like Amazon that are showing others how to get it done, by maximizing their e-commerce potential.  Nordstrom is one department store leader that is looking to get a grasp on balancing online profit and the very costs of providing it.  Nordstrom Chief financial officer Mike Koppel talked about in a recent article regarding Nordstrom’s dilemma.  He stated if “anyone out there” who has figured it out, because “we have a lot of work to do.”

The report from the Internet Retailer via Bloomberg News stated that Nordstrom expect online sales to account for 30% of its’ business by 2020.  This shows that there will be some form of uptick for the retailer with shoppers desiring to shop online.  Online retail itself is set to reach $500 billion by 2018.  As time goes on and business trends begin to evolve, e-commerce is going to take a greater role in generate revenue for brick-and-mortar stores like Nordstrom.  The key moving beyond the obstacles in its way.

Koppel talked about in the article what Norstrom was facing and what was hurting the company’s bottom line.  The article stated, “He explained that the “old model”—big physical stores located mostly in malls—came with high fixed costs, but high leverage. In other words, you had to pour a lot of money into literal bricks and mortar to build stores and train staff, but once your sales reached a sort of break-even point, all the rest was gravy. In essence, the money from a banner sales year could flow straight down to the bottom line once those initial costs were paid for. And that became pretty easy to anticipate and plan against.

Enter the Internet, where the promise of high profits came from the theory that a retailer could sell stuff without having to pay for the overhead expenses of operating locations and hiring lots of labor. Not exactly”, Koppel said.What’s happening is online sales comes with low fixed costs, but the price tag has high variable costs.  This means that the more Nordstrom sells online, the more it spends on operating costs, such as pick, pack and deliver those goods.  And now, “business has been flattening in malls and growing in e-commerce, and so the two strong trends are impacting operating margins,” Koppel told analysts.  The great thing going for Nordstrom is that its’ customers who shop both online and in stores spend three to four times as much there than those who shop just one channel.  Nordstrom may be able to do what some other big name retailers have done, which is implement online store pick up and Same-Day Delivery.  Macy’s and Wal-Mart have all implement both services.

A Same-Day Courier like 1-800 Courier is a viable option to develop cost-effective, same-day service solutions that will attract online shoppers by meeting a demand for convenience.  Technology is driving online growth and the Boston Courier has the delivery expertise to take Nordstrom to the next level online.

Reference:  3.14.16,, Bloomberg News, E-commerce eats into Nordstrom’s profits, and that’s OK

Kate Spade Set To Launch In-Store Pick Up Online Services

Online ShoppingThe growth online isn’t making it easy for retail manufacturers.  The way shoppers have changed their perspective on making their purchases is causing retailers to revamp how to customers into their stores.  One service that companies are opting to offer is online order and in-store pick up services.  It allows customers to take advantage of a value-added convenience service, and at the same time, physical store retailers are able to get traffic into their doors.

Internet Retailer recently reported that luxury apparel and accessories manufacturer Kate Spade is planning to officially launch a buy online, pick up in store program later this year.  The company tested the service late last year and had success.  Within the article, Chief operating officer George Carrara said, “We know that regardless of which (way) she actually transacts, whether that’s online or in a store, that that journey is increasingly starting in the online space, which is certainly advantageous to us in terms of our ability to tell great stories and build engagement in the online experience”.

The fourth quarter numbers show all the reasons why Spade is deciding to offer the service.  It’s net revenue last year went up 7.6% to $429.0 million, from $398.6 million the previous year.  Sales from Kate Spade North America reached $371.3 million, up 13.7% from $326.7 million.  Yet at the same time, sales from Kate Spade International of $52.1 million, down 13.3% from $60.1 million the year prior.  Also, the retailer’s net income went drastically down to $61.5 million, a 51.4% drop from $126.5 million.

One company that has added in-store pick up to its’ repertoire is Wal-Mart.  The retail leader has implemented Wal-MarttoGo in several major US cities.  Wal-MarttoGo allows customers to place their orders online and perform their own pick-up at select Wal-Mart stores.  Loyal customers may already be planning to shop there, and the service only gives them another option to shop online if they choose to.  This results in retaining loyal customers.

Another service that Wal-Mart, Macy’s, Amazon, Google, and others have implemented that Kate Spade may consider is launching Same-Day Delivery this year as well.  Since it tested its’ store pick up program during the holidays last year, Spade could test same-day delivery within a small market this year.  Same-day delivery is expected to reach $987 million by 2019 in the US, which has a lot to do with online retail growth.

A Same-Day Courier like 1-800 Courier partners with a variety of retailers and businesses nationwide, implementing optimal same-day logistic solutions.  The Dallas Courier has the delivery expertise to help any company excel online.

Reference: 3.7.16,, Matt Linder, Kate Spade will launch buy online, pickup in store

Amazon ‘s Minimum Order For Free Shipping Goes Up

Online shoppingIf there’s one thing for sure, Amazon knows what it’s doing providing Prime members free two-day shipping.  Since shoppers feel they have a level of peace of mind with using Amazon throughout the year, it’s a deal that appears to be well worth it.  With its’ latest move, Amazon now has decided to, at the least, test the waters to see if non-Prime members will come on board, expanding its’ already dominating market share online.

The Wall Street Journal recently reported that Amazon has announced that it is raising its’ minimum online order amounts for non-Prime members from $35 to $49 to qualify for free shipping.  The new threshold is said to be an incentive for regular customers to become Prime members.  For $99 annually, Prime members get to receive free unlimited two-day shipping, in addition to streaming movie and music service.  For roughly a decade, Amazon’s minimum order threshold was $25 until 2013, which the retailer took the amount up to $35.

Amazon has reasons to make Prime bigger.  The article mentioned how the retail leader’s annual Prime fee can account for between $4 billion and almost $6 billion in revenue per year, based on estimates in the range of 40 million to 60 million members.  Also, Prime customers spend about double what non-members do over the course of the year, so it makes sense why Amazon is analyzing what can get border line non-members to switch to Prime.

The increase in the minimum amount also has to do with Amazon’s pursuit to contain its’ shipping costs.  The article stated that shipping expenses went up by 37%, equating to $4.17 billion in the last quarter of 2015.  This meant as a percentage of sales, its’ shipping costs increased 12.5%, up from 10.9% in 2014.   In response to order amount increase, Amazon only stated that “from time to time, we review our shipping options.”  With it still being early in the year, the retailer could be attempting to recoup for from the higher shipping expenses.  It also could be preparing to make sure it doesn’t have the same shipping cost results this year.  The more that customers order, the more revenue is generated to offset shipping costs.

With online shopping is expected to reach to $500 billion by 2018, Amazon knows the time is now to continue its’ momentum as the leading US e-retailer.
The competition is already locked in with the same $49 minimum, even higher.  Wal-Mart’s minimum is $50, is at $35 and Target offers a minimum of $25.  Amazon’s shift to a higher minimum will get the attention of other retailers and they will shift their shipping options, if they deem it necessary to gain market share.  Some retailers have turned to Same-Day Delivery to attract shoppers as well.

A number of retailers and businesses have partnered with 1-800 Courier is a New Jersey Courier on the service aspect of fulfilling orders once their purchased online.  The Same-Day Courier utilizes the latest in courier technology to assist companies in maximizing their e-retail operations and devise shipping strategies to compete with Amazon, Macy’s and more.

Reference: 2.22.16,, Greg Bensinger, Amazon Boosts Free-Shipping Minimum to $49, Elevating Prime Service

Snapdeal and dPronto Grow Same-Day Delivery in India

Global shipping conceptIn the US, various big name retail companies are partnering together to get the best out of their e-commerce via Same-Day Delivery.  It is not only swiping across the US to capture more online sales, it is also moving beyond just a trend worldwide.  Same-day delivery has a forecasted increase to $987 million by 2019 in the US.  With the online retail growth in other countries, the service will probably be even higher in those countries as well.  For all the right reasons, two companies in India have decided to make a strategic move, and it involves using same-day delivery to go to the next level.

First Post recently reported that Snapdeal and dPronto have partnered in an effort to offer same-day delivery throughout India.  The partnership will enable Snapdeal to expand it’s customer base into 600 towns across the country, utilizing dPronto’s delivery staff to perform the actual deliveries.  The delivery expert is a last-mile delivery company with a niche of working with e-commerce companies (including hyperlocal market places), offering them last mile logistics services.  DPronto executes their services by leveraging trained fresh manpower supply, disruptive technology and efficient processes that minimize delivery turnaround times and optimize costs.

DPronto’s trained delivery staff will pick up packages from Snapdeal’s sellers or fulfillment centers, and then, deliver the packages to Snapdeal customers the same day.  Whenever a company expands same-day delivery, the last thing a retailer wants to compromise accuracy and on-time service.  With fast service comes a high level of demand for both of these core competencies.  Snapdeal currently has an on-time success rate of 90% with same day delivery, yet will it be able to effectively handle the increase.

DPronto also will be created more jobs there, in particular for India’s youth.  Ashish Chitravanshi, Vice President, Operations at Snapdeal, commented on the initiative stating, “dPronto’s initiative of empowering the less privileged youth by making them employable is highly commendable.  We are excited to be partnering with them to further strengthen our last mile delivery capabilities as we remain committed to our promise of catering to every customer in every pin code.”

Macy’s is an example of a retailer that joined with start-up company Deliv to meet online fulfillment demand from their stores.  Initially, Macy’s used Deliv to perform same-day delivery in 8 major US cities, which included Los Angeles, San Francisco, San Jose, Seattle, Houston, Washington DC, New Jersey, and Chicago.  Sister company Bloomingdale’s also launched the service in San Francisco, Los Angeles, San Jose, and Chicago also.  Macy’s now has same-day delivery in at least 17 markets, leading the way right along with Amazon.

Like Snapdeal, retailers and other businesses can partner with a Same-Day Courier like 1-800 Courier to expand their e-commerce reach and expand with same-day delivery across the US.  The New York Courier has the nationwide footprint to accommodate any big company with multiple big city locations with last-mile deliveries.  The courier is a trusted source for accurate and on-time same-day logistic solutions.

Reference: 3.3.16,, FP Staff, Snapdeal partners with dPronto to expand its customer base for same day delivery

UPS Invests In Deliv To Study Same-Day Delivery

UPS TruckThe time for UPS to expand into Same-Day Delivery could be forming right before us with its’ recent announcement.  Business Insider has reported that UPS has made a strategic investment into start-up company Deliv in order to study the same-day delivery model, analyzing how that market segment evolves.  Same-day delivery is forecasted to reach $987 million by 2019.  This is probably one reason that the world’s largest package delivery company is making strides to get on board with the popular service.

UPS’s managing director of the UPS Strategic Enterprise Fund, Rimas Kapeskas, commented about the investment in the phone interview.  He said, “We don’t participate in the on-demand business as much, and the consumer side of this is still a bit of a mystery to us.  This is a rapidly evolving marketplace and we thought we could learn more by being close to it.”  This is the venture arm of UPS, which is leading a $28 million funding round for Palo Alto, California-based Deliv.  The article didn’t disclose the investment size being committed to the venture, yet it did state that UPS will take a minority stake in Deliv and sit in on board meetings.

UPS and Deliv are learning from one another.  “We are solving a different problem in the last mile,” Deliv Chief Executive Daphne Carmeli stated in a phone interview also.  She went on to say, “and they (UPS) are looking to learn that model and looking to learn about growth in same-day delivery as we are interested to learn from their success.”  Both have their respective niches to help each other gain more ground, ultimately to compete against Amazon.

In recent years, Amazon has built strategically-placed order fulfillment centers in order to implement what it is doing now–same-day delivery.  It also has same-day delivery in the San Francisco Bay Area, Seattle-Tacoma, Dallas-Fort Worth, Indianapolis, Baltimore, Boston, Phoenix, San Diego, Philadelphia, Washington DC, Tampa Bay, Atlanta, and New York.  Last year, Amazon launched free same-day delivery last year in 14 metropolitan cities the US, beginning with California cities, in addition to free same-day delivery in Orlando and Chicago.

The e-retailer is creating much distance between itself and its’ competitors.  From starting to open store locations to pursuing more Prime members, Amazon is a fast moving train, even with stepping into direct competition with UPS and FedEx.  The retail leader is planning to develop a global delivery network, beginning in China.  Online package deliveries is big for Amazon also and China’s e-commerce is expected to reach $1 trillion by 2020, meeting the demand of 900 million shoppers.  A global delivery network will result in customers not having to choose  UPS, FedEx, DHL, and others for shipping.  They will be able to ship directly via

UPS has some ground work to do in order to not only implement same-day delivery, but to do it effectively.  Either way, same-day delivery is growing at a rapid pace and shows no signs of slowing down. Google, Macy’s, Kohl’s, BestBuy, and more are all on board with the service, and it is changing the way we do business.  1-800 Courier is a Nationwide Same-Day Courier that retailers and delivery companies can partner with to establish optimal same-day solutions.  The Chicago Courier has the courier expertise and technology to help capture business in today’s e-commerce market.

Reference: 2.22.16,, Nick Carey/Mari Saito, With Deliv investment, UPS hopes to study same-day delivery market