Do retailers face too many conflicts as they move into logistics services?

Gap and American Eagle Outfitters have joined Amazon, Walmart and Target in peddling logistics services to third-party retailers. But there are concerns over their ability to recruit prospective customers due to data privacy qualms and competitive reasons. What do you think of the opportunities for Gap and American Eagle Outfitters as 3PL providers?

Gap and American Eagle Outfitters have joined Amazon.com, Walmart and Target in peddling logistics services to third-party retailers. A Wall Street Journal article raised concerns over their ability to recruit prospective customers due to data privacy qualms and competitive reasons.

“The customer fulfillment activities are so core to any retailer — any company, but a retailer in particular,” Michael Dominy, VP of supply-chain research at Gartner, told the Journal. “You’re delivering that customer experience. So turning that over to somebody else is always challenging.”

Gap, on Aug. 23, introduced GPS Platform Services, encouraging retailers to take advantage of the logistics capabilities of the second largest apparel e-commerce player in the U.S. for next-day and two-day shipping, short-term storage and cross-docking via its warehousing and a self-service portal. The service offers API integrations to major commerce platforms including Amazon and Shopify.

American Eagle, on Aug. 9, debuted a nationwide Quiet Platforms Delivery Network boasting more than 40 carriers. Tapping technology from its acquisitions of Quiet Logistics and AirTerra, American Eagle said its ability to defer carrier decisions will optimize cost and service levels for shippers and carriers.

Shekar Natarajan, American Eagle’s chief supply chain officer, said in a statement, “We’re leveling the playing field by offering high-quality delivery experiences without prohibitively high investments in management and technology infrastructure.”

In late August, Walmart’s last-mile delivery service, GoLocal, surpassed one million in deliveries in its first year. Target entered the third-party logistics (3PL) space with its 2017 Shipt acquisition. At Amazon, sellers ponied up $103 billion in FBA fees in 2021, making up about 22 percent of Amazon’s revenue.

Additional logistics networks from retailers offer ways for third-party merchants to diversify carriers. Amazon recently added fuel and inflation surcharges to FBA fees.

Although both Gap and American Eagle promise prospective third-party sellers data protections and visibility into supply chain operations, Vivek Astvansh, professor of marketing and data science at Indiana University, suspects fashion competitors may balk at forming logistics partnerships. He told the Journal, “There is a risk that you might be exposing your core competency.”

• Retailers Start Selling Something New: Logistics Services – The Wall Street Journal
• GPS Platform Services – Gap
• GPS Platform Services Launch – Kevin Kuntz/Twitter
• Gap Launches 3PL Distribution Platform – Globe Street
• Gap Inc. Launches Fulfillment Services Offering – Multichannel Merchant
• Quiet Platforms Announces Launch of New Nationwide Delivery Network – American Eagle Outfitters
• Walmart Inc. (WMT) Q2 2023 Earnings Call Transcript – The Motley Fool
• Will ‘coopetition’ enable retailers to profitably deliver online orders? – RetailWire
• Amazon adds a fuel and inflation surcharge to the fees it charges to sellers. – The New York Times