The novel coronavirus has triggered behavioral changes as a significant number of customers are moving toward online ordering of groceries and other essential products or curbside pickup services. This is stimulating demand for efficient delivery and pickup services across the retail industry.
Efficient Delivery: Much Sought-After
Although states have begun to slowly open their economies, the new digital trend is likely to prevail, at least in the foreseeable future. As social distancing is the key to curb the spread of COVID-19, customers are reluctant to visit crowded retail stores. Thus, expediting delivery services has become the need of the hour.
In view of this, retailers are undertaking partnerships alongside coming up with better delivery and pickup services. Companies are particularly focusing on same-day deliveries. Per a technavio report issued in April, the same-day delivery market in the United States is anticipated to rise by $9.73 billion over the 2020-2024 period, at a CAGR of roughly 22%.
Current Focus: Same-Day Delivery
In an effort to up its game in the delivery space, Big Lots, Inc. (BIG - Free Report) announced a partnership with Instacart, a leading online grocery delivery company, on Jun 8. The deal aims at providing same-day delivery service from nearly 1,400 Big Lots stores across 47 states in the United States. Target Corporation (TGT - Free Report) has also made significant headway in the same-day delivery race by acquiring Internet-based grocery delivery service Shipt in August 2018 to provide same-day delivery of groceries, essentials, home, electronics as well as other products. Shipt is now operating in more than 1,500 outlets across over 200 markets.
Rising concerns over the pandemic led Tractor Supply Company (TSCO - Free Report) to expand its tie-up with Roadie, which helped it launch same-day delivery across all its 1,863 U.S. stores as of Apr 14. Notably, this made Tractor Supply the nation’s first general merchandise retailer offering same-day delivery across all its outlets. In April, Costco Wholesale Corporation (COST - Free Report) launched same-day prescription Rx delivery from almost 200 Costco locations as demand for online delivery continues to rise amid the pandemic.
On Apr 30, Walmart (WMT - Free Report) unveiled its Express Delivery service in the wake of the pandemic. The service, which is currently available for nearly 2,000 stores, will help the company deliver items in less than two hours. Notably, customers can order from more than 160,000 products from Walmart’s food, consumables and general merchandise categories through Express Delivery. Apart from this, Amazon (AMZN - Free Report) is known for its efficient same-day delivery services, which are enabling it to deal with the coronavirus-led demand spike.
On Apr 1, Office Depot (ODP - Free Report) also said that it is offering same-day deliveries from about 1,100 namesake and OfficeMax stores. To this end, Office Depot’s alliances with Deliv and Shipt are likely to help customers get their business and school-related supplies through online orders.
Big Lots sports a Zacks Rank #1 (Strong Buy), while Tractor Supply and Office Depot carry Zacks Rank #2 (Buy). Target, Costco, Walmart and Amazon carry a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
Although retailers have gradually started reopening stores, mounting fears of a second wave of coronavirus infections have set it. In the wake of such circumstances, same-day delivery offers a solid chance at boosting e-commerce sales for retailers.
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