Amazon Prime lands in Milan. But are we sure that “faster” delivery is better than “more punctual” or “to the right place”?

NewsFromThePlatform | November 11th, 2015

In the USA they have a saying: “don’t drink and Prime” that has by now replaced the more traditional admonition “don’t drink and drive” with reference to the habit of driving after having a few too many drinks. Indeed, online shopping can become addictive, especially now that you can receive your goods in a very short time. Indeed, Prime Now, the new e-commerce service by Amazon, provides that your parcel is delivered in an hour or two, from 8 am to midnight, seven days a week. And now it has come to Milan: will Italian people get addicted to it?

Over the years we have learned that when the Seattle giant – with its significant marketing and investment capacity – aims for a country, it “colonizes” it to the point of changing it, introducing new consumer habits. It’s a good example of digital disruption that creates new needs. Prime Now, however, is just one of the ways in which you can approach the needs of online buyers. It is geared to high level consumers who are willing to pay extra for a service that meets their needs – to have their goods delivered asap. And the cost is significant, as The New York Times has recently reported.

But not all online shoppers are willing to pay noticeably more or have the urgency of an immediate delivery. For this reason, the challenge of smart logistics involves other segments of the industry as well. For instance, today, especially in Italy, the largest share of the pie is made of customers who leave their shopping cart when they come to delivery options: free delivery usually comes with extended time slots, which means that you can have your items delivered only if you have a concierge service or work from home. However, most customers look for free or almost-free delivery on a precise time and to a well-defined place. To date, at least in Europe, this kind of service is offered by very few players that operate in very specific areas (in Italy, for example, these are Esselunga and Cortilia) and usually own their means of delivery.

Therefore, to compete with them companies need to intercept the signals coming from the market and offer these services while maintaining economically sustainable business models. And it’s here that logistics, with the disruptive innovation it carries today, makes its move and becomes essential to win the competition.

Will real-life delivery be the key to success in the virtual world? This and other questions will be discussed tomorrow at the Contract Logistics Observatory of Politecnico di Milano. Big players like Amazon have already answered “yes” to this question, and are already thinking of alternative means of transport – like drones, which Google says they will use by 2017. Surely, this question must be answered by large and small Italian companies too.