Amazon is taking to the skies. The online retail giant has announced a deal to lease 20 Boeing 767 freighters in a multi-year deal, setting the company up to build its own air delivery network, according to Internet Retailer.
The deal is Amazon’s most aggressive step yet in building a shipping network that is faster and more efficient — and better than what any other shipping company or retail brand can provide. The deal will make Amazon less dependent on its current shipping partners, including the USPS, and could ultimately allow the company to provide more affordable shipping than is currently available.
The deal will run for five to seven years. The 20 planes represent a shipping network on a relatively small scale — only a fraction of Amazon’s shipments will be handled by the planes. But the leased outfit gives the company a chance to test-drive such an air network at a low cost, and with less long-term commitment.
Ultimately, the company hopes to expand that network considerably, likely purchasing its own fleet of planes and building a brand as a major shipping company that serves locations worldwide.
How Amazon’s Deal Affects Other Retailers
In the short-term, retailers don’t have too much to be worried about. Amazon’s air shipping deal won’t transform the shipping marketplace overnight.
But over the span of years, radical change could come to the shipping economy. Amazon could build a network that is impossible to match on shipping costs, and possibly in terms of speed and efficiency. When that happens, retailers will have to lean on other selling points to retain a loyal consumer base. That will likely mean embracing an asset that Amazon doesn’t have: A large, established brick-and-mortar presence.
Several avenues are available to retail brands, and these strategies should be emphasized and upgraded now, before Amazon’s air shipping fleet expands and takes root. Retailers can utilize online-to-offline selling to improve its shipping options while increasing foot traffic into stores.
Omnichannel strategy in general can help differentiate any retailer from online-exclusive brands, and do so while responding to evolving consumer preferences.
An assisted selling tool, for example, can bolster in-store customer service while also facilitating faster product acquisition. Consumers can ask associates to check in-store inventory, contact other stores to inquire about inventory, or order products online to be picked up in-store.
Even if a retailer can’t match Amazon’s price point, there are ways of leveraging a better experience to remain competitive with the online giant. Creativity is required, and mobile technology will be every company’s best friend, but a physical store still has qualities that Amazon can’t match.
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