Apps & Software

Jefferies Highlights What May Be the Next Killer Internet App

With Internet shopping continuing to explode, free shipping has already become a “must-have” for retailers. A new research report from Jefferies points out that the component was part of 53% of all transactions in 2013, so the focus has shifted to faster delivery. What may prove to be the ultimate service for companies that want to sell products on the Internet will be something that is more associated with pizza restaurants: same-day delivery. Here are just some of the companies they mention that are already becoming leaders.

Amazon.com Inc. (NASDAQ: AMZN) is the undisputed leader in online sales and is looking to bolster its stranglehold. The Jefferies report points out that the company reportedly has been testing moving in-house the last mile of order deliveries since early this year. The company currently has one of the most comprehensive fulfillment offerings; it includes free shipping, same-day delivery and delivery to a neighborhood locker. The company’s $99 Amazon Prime offering allows customers free two-day shipping on millions of items, and the company is looking to enhance that. The Jefferies price target for the stock is $450. The Thomson/First Call price target is $419.33. Amazon closed Tuesday at $297.38.

eBay Inc. (NASDAQ: EBAY) is one of the biggest e-commerce platforms in the world and currently offers a compelling suite of products and services that facilitate omnichannel commerce. eBay Now is the company’s same-day fulfillment solution among these services. The company is rolling out the service in major metropolitan areas and is looking to expand quickly. The eBay Now app is available for both Android and iOS Apple devices, and users log in with their eBay user ID. Shoppers can fill their carts with items from participating retailers and place the order by clicking a button. Delivery usually takes one or two hours, depending on a variety of logistics issues. Jefferies has a $60 price target, and the consensus target is $62. eBay closed Tuesday’s trading at $50.95.

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Google Inc. (NASDAQ: GOOG) is known as the online leader for search and advertising, but the company is becoming a large vertical player in retail, and Jefferies thinks its commitment to e-commerce fulfillment should come as no surprise. Google Shopping Express is now available in the San Francisco Bay Area and also in Manhattan and West Los Angeles. The service allows a user to search for and buy in-stock items from local retailers without leaving the Google page. The user can select a delivery window, and a Google courier delivers the goods to the customer. The company is signing up major retailers to participate, and it is estimated the yearly cost to consumers will be $64.99 or slightly higher. The per-use charge is estimated to be $5. Jefferies has a $700 price objective, and the consensus target is $662.32. Google closed trading Tuesday at $515.14.

Same-day delivery is a natural move for the big companies to gain more business. Saving time for busy consumers is a must in our 24/7, 365 world. The sheer magnitude of the logistics involved really only allows the biggest of players to be in the game. While brick-and-mortar companies like Walmart will surely be entering the fray, it takes a well-tuned infrastructure to provide same-day shipping, and these three tech giants have it now.

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