DEATH OF PUREPLAY RETAIL

INTELLIGENCE REPORT DEATH OF PUREPLAY RETAIL LAST MILE

Speed vs. Convenience In May 2015, Amazon launched free, same- day delivery for Prime members in 500 U.S.

Death of Pureplay Retail: Availability of Expedited Delivery Options, by Business Model Percent of Retailers October 2015, n=23 Pureplay Retailers, n=19 Evolved Pureplay Retailers ■ Pureplay Retailers ■ Evolved Pureplay Retailers

cities, further pushing consumer expectations to aggressive new levels. 11 As pureplay e-commerce becomes synonymous with near-instant gratification, e-tailers have rushed to offer consumers expedited delivery options, investing at a faster pace than evolved retailers. Eighty-seven percent of pureplay e-tailers offer two-day shipping, compared with just 63 percent of their evolved retailer counterparts. Pureplay e-tailers have also led the push to next-day shipping, with two-thirds offering a next-day shipping option, compared to just 53 percent of evolved retailers. An additional 9 percent of pureplay e-tailers have begun experimenting with same-day delivery, also outpacing evolved retailer adoption. However, to close the gap in terms of fulfillment immediacy, evolved retailers have a distinct, and inexpensive last mile option that pureplays cannot provide. Click-and-collect services, offered by 32 percent of evolved retailers, allow customers to order from the convenience of their homes, and pick up their purchases as soon as the same day in-store. This functionality, which has been implemented by 60 percent of omnichannel leaders, also facilitates incremental purchases and upsell opportunities when the consumer enters the retail environment.

87%

65%

63%

53%

32%

9%

5%

Reserve / Buy Online, Pickup In-Store 0%

2-Day Shipping

Next-Day Shipping

Same-Day Shipping

Source: L2 Intelligence Report: Death of Pureplay Retail, January 2016.

1

2

1. Athleta customers can select a store in which to reserve products based on real- time in-store inventory.

2. Rent the Runway allows customers to reserve their rentals online before picking them up in one of the retailer’s four stores.

11. “ Amazon launches free same-day delivery for Prime members in 500 U.S. cities, including Seattle ,” GeekWire, May 28, 2015.

20

January 12, 2016