Is Amazon verticalizing its delivery service?

Amazon’s recent announcement about developing its own fleet of freight-carrying planes caught the attention of many, including my fellow RetailWire panelists. Here’s my recent opinion, in the context of Walmart’s similar history taking the reins of its own logistics many years ago:

There is some comparison to Walmart’s history, as Amazon works to take tighter control over its supply chain. The difference is that Walmart’s initiatives were primarily driven by lowering costs — and, in turn, by grabbing market share when they dropped prices in their stores. Over the long run, Walmart’s cost savings on logistics have not translated into better store execution.

Amazon is committed to be price-competitive, of course, but is equally driven by its brand promise of great execution. Instead of being at the mercy of second-party carriers (UPS, FedEx, USPS and so forth), Amazon would rather control its own destiny.


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