Minneapolis — Fulfillment has become the final battlefield in e-commerce and Best Buy has just mounted a counter-attack.
Leveraging its newfound ship-from-store capability, in which its showrooms serve as local distribution points for online orders, the No. 1 CE chain has begun offering free two-day shipping on thousands of items on BestBuy.com.
A minimum purchase of $35 in eligible items is required, and qualifying products are tagged beneath their price.
The move comes as retail chains begin to regard their vast real estate holdings as a competitive advantage, rather than an albatross, and press their stores into double-duty as mini fulfillment centers, as CEO Joe Magnacca touted in his turnaround plan for RadioShack.
At the same time, e-tailers are looking to further narrow their delivery windows to mimic the immediacy of brick-and-mortar shopping.
Indeed, Best Buy’s open-ended effort only begins to address one of the most powerful weapons in the arsenal chief online rival Amazon.com: “Free” two-day delivery on over 20 million items for members of its $99-a-year Prime customer tier.
Amazon has been feverishly building out its nationwide base of distribution centers, even at the cost of losing its online tax advantage, in pursuit of the Holy Grail of e-commerce: same or next-day delivery. Over the summer the company expanded its same-day delivery service to six more markets, for a total of ten major metro areas, and is currently testing a fulfillment service in Manhattan, dubbed Amazon Prime Now, which uses bicycle messengers to make deliveries within one or two hours, the Wall Street Journal reported.
In this regard Amazon trails local IT and A/V dealer DataVision, which offers free same-day delivery throughout the five boroughs for more than 40,000 items.
Target too has entered the fray, offering free shipping on all online orders through Dec. 20 as part of its holiday strategy, and in-store pick-up for some 65,000 products, 80 percent of which can be fulfilled within an hour.
“We’ve been building capabilities that put us in a strong starting position, including the right digital tools and a broad assortment of unique, on-trend merchandise,” said Brian Cornell, chairman/CEO of Target and a former president/CEO of Sam’s Club.
For its part, Best Buy’s online initiatives, which include a bigger spend on digital marketing, boosted online comps 21.6 percent last quarter. CEO Hubert Joly, who piloted the ship-from-store program last year in 50 stores, said it has since expanded chain-wide to all 1,400 locations, and will help address Best Buy’s failure to close as many as 4 percent of online customers in the past due to out-of-stocks.
