Retailers are expanding assortment and improving fulfillment, making Amazon Prime’s value proposition of free two-day shipping on millions of items for $199/year seem less enticing. But do other retailers really have a chance of catching up to the e-commerce giant?
Walmart aims to compete with Amazon by expanding its marketplace assortment available for free two-day shipping, and companies like Deliverr are providing this opportunity to Walmart merchants that aren’t yet optimized for expedited fulfillment. During the holiday period, other competitors also aimed to compete with Amazon to offer a broader assortment of products and improvements to fulfillment. A fifth of retailers in Gartner L2’s Holiday 2018 report, including Target, removed free shipping minimums for a limited time during the holiday season.
However, less than 5% of Walmart’s Q3 revenue last year came from e-commerce and less than 6% of Target’s FY 2018 revenue came from digital sales, indicating that retailers have a lot of catching up to do in order to compete with Amazon’s nearly 50% share of the US e-commerce market. As retailers like Walmart and Target lay the foundation to be able to compete with Amazon on assortment and fulfillment, Amazon continues to to improve the value proposition of Prime through services, further solidifying its position as the most dominant retailer with the most dominant loyalty program.