Grand Junction - Local Delivery Reinvented

Amazon Will Buy Sears and Other Big Predictions for 2017

For 2016 I made some predictions for the year in logistics. I was spot on with several (e.g., valuation pressure for on-demand delivery companies) and not so good on others (e.g., consolidation). Overall, though, I was good enough to make some more for 2017. So here goes:

1. Amazon will Buy Sears – Imagine the shake up as Amazon enters into brick and mortar retail in big way, acquiring some great brands (Craftsman, Die Hard, Kmart, Kenmore) and also instantly adding 1,300 forward-deployed inventory locations for same day delivery.

2. Uber-like visibility for package delivery – Shippers will have increased expectations for their delivery partners as they strive to provide consumers with visibility similar to what they get with Uber (driver photo, license plate and phone number, driver rating, route mapping etc.). Delivery providers will need to scramble to collect and present all of this visibility data to the end recipients.

3. Uptick in Storefront Delivery – Major retailers will introduce more comprehensive and innovative storefront delivery programs. A few years of experimenting will give way to firm commitments to match Amazon, even if they are money-losing operations for several years.

4. Drone mania comes crashing down – Actual commercial realization of drones for delivery will not materialize in 2017 as the hard realities of technology hurdles, regulatory issues, and common sense drag down the hysteria.

5. Google Express will shift their focus to small businesses – It’s no mystery why Google is in last mile: They need to stem the loss of ad revenue from e-commerce buyers skipping Google search and going directly to Amazon. Google Express is a way to attract retailers with a unique local delivery option. As larger retailers develop their own local delivery strategies, expect Google to shift to smaller retailers who can’t do it on their own.

6. FedEx will get off the sidelines – Expect FedEx to begin to innovate on local delivery through acquisitions, investments, or an innovation center. UPS has made some investments in local delivery (Convoy, Deliv, Shutl), but FedEx has held firm. Expect that to change as the threats of local delivery become more entrenched.

2017 certainly is shaping up to be an interesting year with the pace of innovation and disruption in logistics accelerating.

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