The Amazon Prime playbook: Fast deliveries the next goal post for online retail

Here’s How It Was Supposed To Be: A new-age consumer brand starts by selling on Instagram, then launches a website, invests in content marketing to promote the brand, and also lists its top-selling products on Amazon. Why? Amazon helps the brand get access to a wider audience.

Here’s What Happened: A shopper discovers this new-age brand on Instagram, goes to its website to place an order, notices a delivery time of 3-4 days, checks on Amazon India, find the same product at the same price available for delivery the next day, and places the order on Amazon.

“We realized we were eventually losing our customers to Amazon. And once they get used to that service level, there is no going back,” said the founder of a large direct-to-consumer personal care brand earning over Rs 15 crore ($2 million) in monthly sales.

How Did Amazon Manage This? With its decentralized warehousing and supply chain capabilities. While a brand dispatches an order from its central warehouse, Amazon dispatches the same order from a warehouse closer to the customer. The result: faster and less expensive deliveries. “Customers love the two-hour convenience of Fresh for daily grocery,” Siddharth Nambiar, Director of Category Management at Amazon India, said in February, referring to Amazon’s instant grocery delivery service.

Not Just Amazon: Flipkart, Swiggy, Dunzo, Nykaa, and 1 MG are also focused on accelerating their delivery speeds, especially in large metropolitan cities. These brands have capital leverage, which helps them build supply chain moats pan-India. “Next-day (delivery) is too late… (has to be) within the same day,” said Vijayendra Singh, Chief Operating Officer at Apollo 24|7, the online pharma and consultation platform of Apollo Hospitals group. “We are now moving toward different categories like two-hour express deliveries… Our aspiration is to deliver 95% of our orders within two-four hours.”