amazon shipping
TRANSCRIPT
Providing in-depth insight, data, and analysis of everything digital.
Source: AP
Amazon and the New Age of Delivery
THE EVERYTHING SHIPPER
AMAZON IS INVESTING HEAVILY INTO SHIPPING
FIRST, WHAT IS AMAZON?
Source: Getty
STILL THE FASTEST-GROWING MAJOR RETAILER
Source: Amazon
Amazon Net Sales
$0
$40
$80
$120
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bill
ion
s
AMAZON IS US E-COMMERCE
Source: Wall Street analysts
Amazon’s Share Of US E-Commerce Market
0%
10%
20%
30%
40%
2008 2009 2010 2011 2012 2013 2014 2015
AND E-COMMERCE IS WHERE ALL THE GROWTH IS
Source: US Census, comScore, BI Intelligence
Forecast: US E-Commerce Sales
BUT E-COMMERCE OPERATIONS ARE EXPENSIVE
Source: Deloitte
What US Consumers Consider “Fast Shipping” (2015)
0%20%40%60%80%
100%
Same-day Next day Within 2days
Within 3-4days
Within 5-7days
Within 1-2weeks
Fast Shipping Not Fast Shipping
AND AMAZON IS NOT IMMUNE TO THOSE COSTS
Source: Amazon
Amazon Shipping Costs
$0
$2
$4
$6
$8
$10
$12
$14
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Bill
ion
s
AMAZON’S DOUBLE-EDGED SWORD
Source: Amazon
Amazon Shipping
Costs
$0
$40
$80
$120
20
04
20
05
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Bill
ion
sAmazon Net Sales
$0
$4
$8
$12
20
06
20
07
20
08
20
09
20
10
20
11
20
12
20
13
20
14
20
15
Bill
ion
s
SO AMAZON HAD TO OFFSET THOSE COSTS
Source: Amazon
Amazon Shipping Costs And Shipping Revenue
$0
$5
$10
$15
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mill
ion
s
Shipping Costs Shipping Revenue
AND IT DID THIS IN TWO WAYS
#1: AMAZON PRIME
0
20
40
60
80
100
Dec
-11
Mar
-12
Jun
-12
Sep
-12
Dec
-12
Mar
-13
Jun
-13
Sep
-13
Dec
-13
Mar
-14
Jun
-14
Sep
-14
Dec
-14
Mar
-15
Jun
-15
Sep
-15
Dec
-15
Mill
ion
s
Source: Piper Jaffray, Morningstar, RBC, CIRP, BI Intelligence
Amazon Prime Members Worldwide
FREE SHIPPING DRIVES PRIME SIGN-UPS
Source: RBC Capital Markets
Primary Reason US Amazon Prime Members Signed Up For Prime
#2: FULFILLMENT BY AMAZON
Source: Amazon
THIRD-PARTY SELLERS CORE TO AMAZON
Source: RW Baird
Percentage Of Amazon Orders, By Seller
83% 79%81%
86% 87% 89% 90%
0%
50%
100%
Overall Pet Supplies MusicalInstruments
Automotive HomeSupplies
Appliances Patio, Lawn
Amazon as seller Third-party seller
BRANDS FEEL STRONG-ARMED BY AMAZON
Source: Wall Street analysts
Amazon’s Share Of US E-Commerce Market
0%
10%
20%
30%
40%
2008 2009 2010 2011 2012 2013 2014 2015
AMAZON’S COSTS NOW UNDER CONTROL
Source: Amazon
Amazon: Growth Of Shipping Costs vs. Growth Of Shipping Revenue
0%
20%
40%
60%
2008 2009 2010 2011 2012 2013 2014 2015
Cost Growth Revenue Growth
BUT AMAZON WON’T STOP THERE
Source: Amazon
Amazon Shipping Costs And Shipping Revenue
$0
$5
$10
$15
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Mill
ion
s
Shipping Costs Shipping Revenue
ENTER: DRAGON BOAT
Code Name For Amazon’s Own Global Shipping Service
CROSS-BORDER SHIPPING BY AIR AND SEA
AMAZON NOW HAS FREIGHT AIRCRAFT
Number Of Freight Aircraft Planes In Operation, By Carrier
20
240
370
0
100
200
300
400
Amazon UPS FedEx
March 2016
Source: Company filings, BI Intelligence
DRAGON BOAT IS PART OF A LARGER INITIATIVE
AMAZON DELIVERY DRONES
Source: Amazon
Source: US Census, comScore, BI Intelligence
Delivery Fee That Consumers Pay For A Small Package
5lb package delivered within 10 miles in the US
BRINGING A NEW ERA OF FAST, CHEAP SHIPPING
AMAZON LOCKERS
Source: Wikipedia Commons
AMAZON IN-STORE PICKUP
Source: Getty
IN-STORE PICKUP GROWING POPULAR
Source: Slice Intelligence
Percentage Of E-Commerce Sales That Are In-Store Pickup, By Retailer (2015)
AMAZON ISN’T THE ONLY RETAILER SHIPPING
PARTNERS SHOULD BE CONCERNED ABOUT …
ALIBABA IS FOLLOWING A SIMILAR TRAJECTION
Source: Alibaba
ALIBABA GMV
Source: iResearch
Alibaba Global Gross Merchandise Volume
$0
$50
$100
$150
0%
20%
40%
60%
Q12013
Q22013
Q32013
Q42013
Q12014
Q22014
Q32014
Q42014
Q12015
Q22015
Q32015
Q42015
$ Billions
ALIBABA’S SHARE OF CHINA E-COMMERCE
Source: iResearch
Share of China B2C E-Commerce Market
61.4%
Others Jumei
Yixun Amazon
Dangdang Yihaodian
Gome Vip
Suning JD
Tmall
CHINA E-COMMERCE MARKET STRUCTURE
Source: iResearch
China E-Commerce Sales, By Type Of Marketplace
25.3% 34.6% 40.4% 45.8% 51.4% 56.1% 59.6%
0%
50%
100%
2011 2012 2013 2014 2015 2016 2017
B2C C2C
IN THE END, DELIVERY VOLUME WILL
KEEP INCREASING
Year-Over-Year Increase In Holiday Package Shipments, By Carrier (2015)
Source: UPS, FedEx
LEADING TO DELAYS AROUND PEAK SHOPPING
AND RETAILERS WILL PICKUP THE SLACK …
SO, FRIENDS OR FOES?
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