Logistics is becoming the battleground for retailers looking to compete with Amazon.

Over the last year, both Walmart.com and eBay have partnered with third-party logistics providers to compete with Amazon’s two-day shipping standard; both marketplaces are also working with installation services, with eBay working with Handy, Porch and Installernet, and Walmart with Handy and Porch. The goal is to match Amazon on delivery while adding additional value through in-home help. Providers are bullish on their capabilities to drive conversion for retailers and help build logistics infrastructure that would otherwise be too costly for retailers. But others say they’re test cases before larger brands decide on acquisitions or the development of in-house capabilities.

Two-year-old Deliverr, which works with Walmart, eBay, Etsy, and Shopify, uses a tech platform that connects sellers with a network of warehouses and logistics providers so they can offer two-day delivery.

“[Merchants] can send inventory to multiple places, and Deliverr can activate any channel, whether it’s Walmart, eBay, Shopify, or Amazon,” said Deliverr co-founder Harish Abbott, in an interview at the National Retail Federation’s Big Show on Monday. “[Sellers] don’t have that network.”

Similarly, installation startups are working with marketplaces that compete with Amazon.

Sometimes Amazon scares [other] retailers,”said Oisin Hanrahan, Handy CEO. “Retailers are figuring out what they need to do to get the best possible experience, increase conversion rates, sell more products — the order value goes up and customers are generally happier.” In addition, Handy can offer retailers and brands data about customer preferences.

Walmart recently told Digiday that tie-ups with companies like Handy offer customers added convenience. Andrew Lipsman, retail and e-commerce analyst at eMarketer, said moves to tie-up third-party logistics providers are evidence these companies are in a test phase to figure out whether in-house capabilities make sense.

“Walmart and eBay are both in experimentation mode and trying to figure out what works,” he said. “For the partnerships that pay off, I think they’re definitely willing to acquire if the case and opportunity present itself. Walmart [acquired] Parcel and you can bet there will eventually be more logistics acquisitions down the road.” Target’s Shipt acquisition is another example of this, but as CEO Brian Cornell said at the National Retail Federation Big Show on Monday, it’s a move that was motivated by the enhanced customer service that Shipt’s personal shopper service offers.

Others say outsourcing will continue in some form, especially given that it’s not possible for Amazon’s competitors to replicate its logistics machine.

“It’s important to point out that owning and operating this line of business isn’t core to e-commerce-first players, like eBay,” said Caroline Klatt, CEO and co-founder of Headliner Labs.

 

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