Amazon, Target Place Emphasis on No-Rush Delivery

Need to Know

• Major retailers are offering lower-cost, no-rush delivery and pickup options to offset a 33% spike in online orders this holiday season.
• Incentives for choosing no-rush delivery include discounted shipping and cashback.
• Examples include bundling several items together into one order at the end of a week or picking up at centralized hubs.
• Retailers stand to save money by incentivizing no-rush delivery, in addition to helping relieve stress on their fulfillment networks.

Analysis

As the holiday season approaches, major retailers are looking to relieve stress on their delivery and fulfillment networks by encouraging customers to select no-rush delivery options on non-urgent items.

The shift towards an emphasis on no-rush delivery may seem counterintuitive, particularly as retailers such as Amazon have set new delivery standards recently with guaranteed one- or two-day delivery of orders through Amazon Prime. But retail forecasters are expecting online orders to spike 33% year-over-year this holiday season, which will put an unprecedented level of stress on shipping and fulfillment networks. Therefore, companies such as Amazon and Target are incentivizing their customers to select alternate delivery options—such as slower shipping or in-store pickup—for items they don’t need to have delivered in time for the holidays.

Amazon is leading the pack in its no-rush incentives: ordinarily, the company would offer discounts of between $1 and $2 for no-rush shipping, but this year, those incentives reached an upper-bound of $3 off. Earlier this week, the retailer highlighted alternative delivery options, including the option for shoppers to pick up their packages from brick-and-mortar retail locations and neighborhood “hubs.” The company also offers a service called “Amazon Day”, which lets shoppers choose to receive all of their Amazon orders on a single day, instead of throughout the week.

Target is also offering customers a lower-cost no-rush shipping option, with customers able to save $1 if they select an option, similar to the Amazon Day system, that will see their orders consolidated into fewer packages, and therefore arriving more slowly, while Macy’s is offering cashback to shoppers who select no-rush shipping.

“Guest response has shown that many guests prefer a reduced number of deliveries, and that speed is not the only factor in a great online shopping experience,” a Target spokesperson said of no-rush shipping, while a spokesperson for Amazon said no-rush shipping is “about providing more choice for customers.”

While no-rush shipping immediately saves money for consumers, it also proves lucrative for retailers. According to a 2019 report by MIT, retailers saved anywhere from 3% to 32% on logistics costs by offering no-rush delivery options.

In addition to the shift towards no-rush delivery, retailers are working to diversify their shipping and delivery options for consumers in a variety of ways. Walmart, for instance, recently announced that Walmart+ members would no longer have to spend a minimum of $35 to get free delivery. Meanwhile, Uber Direct, the ride-sharing service’s same-day retail delivery option, just launched in Canada.