Consumer expectations for online delivery speed and costs have been driven by players such as Amazon. Market leaders, including Amazon, Alibaba, and JD.com, recognize the importance of delivery speed and costs in the consumer decision journey and use their capabilities and resources to create competitive advantage. How can incumbent store-based retailers and direct-to-consumer brands compete when the benchmark is free same-day delivery?
We conducted a broad effort in which we took stock of the current situation, focusing on Europe, particularly Germany, from both a market and a consumer perspective. Our analyses show that although the pressure on incumbent players may appear to be overwhelming, retailers and direct-to-consumer brands with their own stores have a strategic asset they can leverage in the future: their dense store networks, which give them proximity and (potentially) quick access to their consumers. But to fully benefit from their networks, omnichannel players will need to consider changing gears in four areas: consumer preferences, shopping experience and delivery speed; infrastructure and systems; store operations; and economic mindset.
