"Target, Walmart Shares Take Hit After Amazon’s Move to One-Day Shipping"

"Retailers have invested heavily in supply chains in part to stay competitive with e-commerce giant"

WSJ Article published April 26, 2019 

https://www.wsj.com/articles/target-walmart-shares-take-hit-after-amazons-move-to-one-day-shipping-11556310486?mod=searchresults&page=1&pos=1

Photo Source: https://finance.yahoo.com/news/amazon-prime-oneday-shipping-is-money-wellspent-analysts-111713723.html; AP Photo/Mark Lennihan, File

Analysis by Nancy Rodriguez

According to this Wall Street Journal article, Amazon's announcement to provide free one-day shipping to its Prime members simultaneously negatively affected its competitors' shares and increased their own.The author reported that both Walmart and Target, who only provide free two-day shipping, saw a drop in their shares. Amazon is investing $800 million to provide this fast shipping for everyone, which adds to consumer's preference to shop online. The article mentioned that last year Amazon increased their Prime membership by $20 to cover their costs and expansion in services. Although Walmart and Target have not announced one-day shipping, they have also spent money on faster shipping such as in-store pickup orders, which has cheaper shipping costs. As noted in the article, it is expected that one-day shipping could soon be a consumer expectation. 

This article relates to the marketing concept, because logistics, pricing and competitor analysis are addressed. Amazon's faster shipping may be costly, but their shares and their competitors' drop in shares are proof that one-day shipping will only increase Amazon's sales. However, I think by providing faster shipping, Amazon will have to use the money they are investing into this well, such as adding more warehouse workers, to ensure efficiency and quality. Their large increase in Prime membership pricing is also a way to ensure they can cover both their variable and fixed costs, especially if they intend to deliver faster everywhere. This is especially important, because Amazon is catering to a large target market; everyone likes faster online shipping. The article provided a competitor analysis of how although Amazon is well ahead of the game, Walmart and Target are not companies that will stay behind. Those companies will most likely and should observe how Amazon carries out this promise to customers and intend to do it better. 

I chose this article, because having one-day shipping from Amazon appeals to me as a consumer. Although all three companies mentioned in this article appeal to me, Amazon is a big competitor and is well ahead of the game. One-day shipping almost eliminates in-store shopping and further diminishes the online shopping problem of having to wait for a product.