Amazon Shipping’s parcel delivery delights American Eagle Outfitters

The biggest pain points Amazon Shipping solved for American Eagle were seven-day per week delivery and price predictability, said Brandon Friez, senior vice president global logistics and supply chain intelligence, during a session at Parcel Forum 26 here. The best surprise was how well Amazon Shipping performed during the peak shipping crunch.

Concerns that the Prime Day shopping event might cause shipping delays because Amazon’s delivery system would prioritize the surge in Amazon orders never materialized and delivery speeds never slowed down through the holiday shopping season.

“Normally, every day as we approach peak we’re stressing about what carriers we’re turning off because we’re watching their performance [degrade]. So, we were actually amazingly happy, and we actually delivered our best peak ever for our consumers,” Friez told hundreds of parcel industry practitioners and shippers at the event. “Because a missed package is an unhappy customer, especially at that time of year. But, Amazon was very reliable, whether it was a pickup at the distribution center, whether it was the communication flow to the consumer, whether it was the communication back to us, it really was all flawless.”

American Eagle operates 1,170 stores across North America, four distribution centers and fulfills e-commerce orders from about 700 stores.

Why It Matters:  American Eagle’s testimonial on Amazon Shipping is relevant because it signals to potential users on the fence that the new service is credible, but it also will amplify concerns among other parcel carriers that Amazon could increasingly take market share. 

“We wanted a multi-carrier strategy. We didn’t want any carrier that we relied on more, to derisk. Basically, Amazon was just another carrier in our ecosystem. So, you know, we look at all of our carriers and evaluate on cost, speed, quality. And when Amazon was the best choice, [based on a package’s attributes], we went with it,” said Jen Baikr, American Eagle’s vice president of transportation and customer promise.

American Eagle was frustrated that it couldn’t consistently meet customer expectations for fast delivery if they ordered late in the week because many last-mile carriers don’t offer weekend service. Amazon essentially eliminated one-to-two days in delivery delays, helping to reduce overall delivery time by 16%, the supply chain executives said. 

Another frustration is that shipping costs in recent years have regularly crept up as carriers add multiple fuel and delivery surcharges, increasing the cost per package. Amazon’s predictable, transparent pricing filled a big need for the retailer. 

“Predictability is a key thing with your pricing b/c at the end of the day you’ve got a budget you’ve got to hit. If you’ve got pricing that’s changing every month from your partners it really makes it difficult to operate the business successfully,” said Friez.

Meanwhile, Amazon’s contact per order ratio — a measure of how often consumers contact the company via the website, call centers or chat to complain about a delivery — is the best among the dozen carriers American Eagle uses, he added.

“Delivery is not just a cost center, it’s also a growth driver. The expectations these younger kids have are crazy on how quick they want things. So giving people those shopping experiences is what you’re going to need to get customers to stay with you. We invest so much in the brand, the last thing you want is that final touch point to be a let down for you,” Friez said. “Inconsistency is bad. Whatever you tell the customer, it’s not so much that it has to be quick; it has to be reliable. And giving them not only reliable data, but that consistent experience is important.”

Amazon’s own internal data shows 85% of customers will not return to a seller if they have a bad delivery experience, said Theresa Uthurralt, director business development for Amazon Shipping.

“The inverse of that is true too. Delivery excellence and quality drives a lot of [activity] from the customer. We see that in a lot of ways – our conversion rate at checkout, it increases basket size and it also increases shopping frequency. So there is a real ROI there. Good delivery is good business,” she added.

Click here for more FreightWaves/American Shipper stories by Eric Kulisch.

Write to Eric Kulisch at ekulisch@freightwaves.com.

RELATED STORIES:

Amazon rebrands third-party logistics arm as unified supply chain service

Amazon calls timeout on 21 Air cargo contract

CooperVision contact lens shipment stranded on disabled Amazon cargo jet