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eBay guarantees fast and free shipping
BI Intelligence
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eBay has announced that it's launching a “Guaranteed Delivery” program, which will provide delivery within three days or less for 20 million items and ship millions of them for free.
eBay will add a search function to allow customers to filter by one- and two-day delivery.
The company will qualify sellers for the program by looking at their delivery history, and will refund shipping or provide coupons toward future eBay purchases for items delivered after the guaranteed date. The improved delivery service will be key to sustaining the company’s growth after a strong year spurred by several initiatives.
eBay shifted focus to direct sales, began TV advertising to target millennials, and improved its use of structured data last year, which resulted in a strong Q4. In particular, the company benefited from its use of structured data to improve search results and make it easier to find new products on its site. eBay also has plans to re-do its homepage over the next year, with the new version expected to pull in recently viewed and saved products, as well as boast a recommendations section.
Although free and fast shipping will be necessary for the company to compete, improved product discovery through personalization and more relevant search results will sustain its differentiation in e-commerce. Free and fast shipping has become ubiquitous in e-commerce, and it is extremely difficult to compete without offering this perk to customers. eBay’s competitive advantage lies in that items sold on the site are usually rare or hard to find — a draw that's irrelevant if the items customers are looking for are difficult to find on the site.
The parcel delivery industry — a segment of the shipping sector that deals with the transportation of packages to consumers — is booming thanks to e-commerce growth, and players outside the industry want a piece of the pie.
BI Intelligence, Business Insider's premium research service, has compiled a detailed report on the future of shipping that looks at efforts by Amazon, Alibaba, and Walmart to handle more of their own shipping and concludes that big retailers are well positioned to disrupt the parcel industry.
Here are some of the key points from the report:
Transportation and logistics could be the next billion dollar opportunity for e-commerce companies. The global shipping market, including ocean, air, and truck freight, is a $2.1 trillion market, according to World Bank, Boeing, and Golden Valley Co.
There is much at stake for legacy shipping companies, which have seen a boom in parcel delivery as e-commerce spending has risen. Twenty different partners currently share the duties of shipping Amazon's 600 million packages a year, with FedEx, USPS, and UPS moving the most.
Amazon, Alibaba, and Walmart have so far focused on building out their last-mile delivery and logistics services but are increasingly going after the middle- and first-mile of the shipping chain.
Amazon has already made major moves across each stage of the shipping journey. It launched same-day delivery service, which it handles through its own fleet of carriers, cutting out any third-party shippers. The company also recently began establishing shipping routes between China and North America.
Walmart's interest in expanding its transportation and logistics operations is almost purely related to cost-savings. It's begun leasing shipping containers to transport manufactured goods from China and is making greater use of lockers and in-store pickup options to cut down on delivery costs.
Alibaba has begun leasing containers on ships, similar to Amazon's Dragon Boat initiative. This means that Alibaba Logistics can now facilitate first-mile shipping for third-party merchants on its marketplace.
In full, the report:
Sizes the market for the shipping industry.
Explains how the industry operates in broad terms.
Suggests why major e-commerce retailers should disrupt the space.
Outlines the shipping initiatives of Amazon, Walmart, and Alibaba.
Concludes how these moves might impact traditional carriers.
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