ALEXANDRIA, Va.—Amazon is now offering same-day delivery for Prime members from four brick-and-mortar retailers, including PacSun, Diesel, Superdry and GNC. The service is available in 10 cities and is free for Prime members if they spend $25 or more, or $2.99 if their order is less than $25. Some of the retailers also have the option to order online and pick up their items in store.
Retailers fulfill orders from their inventory and then hand off the order to an Amazon Flex driver who delivers the order to the customer. The system allows Amazon to get packages delivered faster, as the company continues to heavily invest in one-day and same-day delivery, reports CNBC. Amazon has expanded the number of items that are eligible for one-day shipping, and it has thousands of items that can be delivered in a few hours.
In May, Amazon announced a similar offering with its Flex delivery drivers, by using the drivers to deliver products from mall retailers in Las Vegas from Fashion Show Mall, Tysons Corner in Virginia and Chandler, Arizona.
Amazon Flex uses contracted workers to deliver packages from their own vehicles and operates in over 50 cities. The drivers make between $18 and $25 an hour, depending on the type of shift, and are responsible for costs like gas, tolls and car maintenance.
Ramping Up Delivery Speeds
Consumers are becoming accustomed to ultra-fast delivery speeds from retailers. There has been an explosion of fast-delivery grocery platforms, including Instacart offering 15-minute delivery in select markets.
Target is also stepping up its e-commerce delivery speeds by opening three additional delivery hubs to fulfill online orders faster and at a lower cost. The delivery hubs are called sortation centers, and the locations receive already-boxed online orders from area stores twice a day. Packages are sorted by town and/or neighborhood so customers receive their orders quicker and so that more can be delivered at a time.
Many of the packages are loaded into personal vehicles to be delivered by gig workers—many of whom work for Shipt. E-commerce is nearly 20% of Target’s sales, and more than half of these sales are same-day services, such as curbside pickup, and the rest are shipped to homes.
The company is also attempting to reduce delivery costs by encouraging more customers to use Drive Up, where customers park and their orders are delivered to their vehicles. Drive Up costs Target 90% less to fulfill than if it shipped packages from a warehouse, Mark Schindele, chief stores officer, told CNBC.
Walmart announced in June that it will open four "next generation" fulfillment centers over the next three years in an attempt to make its e-commerce business more profitable. The centers will be the “first of their kind” for Walmart and will use a combination of people, robotics and machine learning. CNBC also reports that Walmart is using its stores as warehouses and is using contract workers to deliver packages.
Here are three reasons why businesses are tapping into the gig economy.