Free two-day delivery was so 2018. This holiday season, it’s shaping up to be about next-day delivery.
Best Buy is among the retailers who have been able to shave a day off delivery through modernizing their supply chains. The electronics giant announce Tuesday that about 99% of its customers are now able to get free next-day delivery on thousands of items through Bestbuy.com. But bigger and heavier items such as big-screen TVs and refrigerators are not eligible.
“Our customers want and deserve convenient, fast options to receive our great products,” Rob Bass, Best Buy’s head of supply chain, told analysts last month at an investor’s meeting in New York. “And they want it on their terms.”
At that meeting, he said Best Buy was able to get items next day to about 80% of its customers with plans to significantly increase that percentage before the holidays.
In the last several years, many retailers have been investing millions of dollars to overhaul their supply chains in order to better compete with Amazon’s industry-setting speed.
Carlos Castelan, a retail consultant with Minneapolis-based Navio Group, said one-day delivery will likely make a bigger difference in major metro areas where it may be harder for customers to get to stores to take advantage of buy-online, pickup-in-store services.
“I think it’s going to be an incremental improvement, but not the game-changer that two-day delivery was,” he said. “The question from the retailers’ standpoint is if the extra costs are going to be worth it in providing that extra day of service.”
Best Buy has improved the speed of its deliveries by both shipping online orders from stores as well as from its distribution centers, seven of which now have automated storage and retrieval systems that cut down on the amount of walking warehouse employees have to do.
It’s also built three metro e-commerce centers in Los Angeles, Chicago and New York, which are located close to major urban areas and are designed for fast, efficient fulfillment. It has placed automated packaging systems in three of its centers, with plans for more, which adds to speed and cuts down on the amount of excess packaging used to ship items.