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Amazon’s Sunday Delivery Turns Holiday E-Commerce Upside Down

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Amazon’s (NASDAQ: AMZN) announcement of Sunday delivery this week effectively turned the traditional e-commerce world upside down. It truly is a game-changer, not only for online retailers but also for brick-and-mortar stores that are battling for their share of sales this holiday season.

Amazon and the United States Postal Service (USPS) said that New York and Los Angeles customers using Amazon Prime’s free two-day shipping service can now receive packages on Sunday. Next, Amazon will roll out the service to other major cities including Dallas, Houston, New Orleans and Phoenix, in 2014.

“We’re excited that now every day is Amazon delivery day,” said Dave Clark, vice president of Worldwide Operations for Amazon, in a company statement.

The move further solidifies Amazon’s place at the top of the U.S. retail heap. Amazon may not yet have the scale that Wal-Mart (NYSE:WMT) has as the world's largest retailer with more than $400 billion in annual global sales, but it is the fastest-growing retailer. Amazon has gained a foothold in nearly every category of retail sales, including autos, dry groceries, fresh groceries, flowers, and luxury beauty products.

We can only imagine which retail category Amazon will take over next. Restaurant deliveries, perhaps?

With six fewer shopping days this holiday season, all retailers have stepped up their ordering and fulfillment systems, e-commerce functionality, and delivery functionality. Many are offering free shipping and pushing Christmas ordering deadlines further out this year.

However, no other retailer is offering Sunday delivery as Amazon is. Even though USPS Postmaster General and CEO Patrick R. Donahoe said that USPS is “very happy to offer shippers like Amazon the option of having packages delivered on Sunday” during the Amazon announcement, other retailers have not made Sunday delivery announcements.

The deal is also a big win for the USPS, which has come under fire for its slower delivery service and funding issues (remember its much-maligned, failed proposal to do away with Saturday delivery?). Online merchants are increasingly relying on United Postal Service (UPS), FedEx, and other carriers to get their shoppers’ packages to them in a quality, timely manner.

Perhaps this arrangement will encourage more retailers to shift more package shipping business back to USPS. Only time will tell.