What does the Amazon fulfillment center means for Des Moines shoppers?
[PHOTO: Amazon confirmed it was behind Project Bluejay which continues construction on Thursday, Feb. 6, 2020, in Bondurant.
Brian Powers/The Register, Brian Powers/The Register]
What does the Amazon fulfillment center means for Des Moines shoppers? More selection, next-day delivery
Katie Akin, Des Moines Register
Published 6:34 p.m. CT March 27, 2020 | Updated 12:06 p.m. CT April 1, 2020
Upcoming fulfillment center could bring same-day shipping to the Des Moines metro.
The Des Moines Register
Nancy Austin was one of a few dozen people shopping at Jordan Creek Town Center on a warm weekday afternoon in late February.
"I try to keep the brick-and-mortar stores open," the retired high school administrator said as she exited the mall's Scheels store. "I like to touch and feel and try on and see everything, rather than on a computer."
When it comes to finding specific craft supplies, like the acrylic paint pens she wanted to use with her granddaughters, Austin said she often turns to online retailers. That's especially true when the weather is bad, she said, or when she already knows exactly what she wants.
Sometimes that means waiting a few days to get those items delivered to her doorstep. But for Austin and other shoppers in the Des Moines metro area, online shopping through Amazon, the world's largest online retailer, is about to get a lot faster.
The construction of an Amazon fulfillment center in Bondurant and delivery center in Grimes is expected to shorten wait times across the metro. It means more products available for next-day shipping, according to international logistics expert Marc Wulfraat.
Same-day shipping is possible, but unlikely for now, he said.
Austin said the speed may persuade her to order online more often.
"Two days isn’t really that bad, but one day is even better," she said.
The development across the Des Moines metro comes as demand for delivery increases amid brick-and-mortar store closures and product shortages due to the coronavirus pandemic.
That's led to temporary increases in shipping times for Amazon shoppers across the metro. But Mike Grella, who was Amazon's director of economic development from 2012 through February 2019, said Wednesday that the pandemic is unlikely to impact Amazon's long-term development in the area, including the construction of the Bondurant and Grimes centers.
"They are pushing full steam ahead on construction projects and building out (a) logistics network," Grella wrote in an email.
Amazon spokesperson Jen Crowcroft said in an email that the company was "very much looking forward to the new Amazon fulfillment center in Bondurant and new delivery stations in Iowa City and Grimes later this year."
Though the Bondurant fulfillment center is not slated for completion until late this year, Amazon's development plans in Iowa are well underway.
► More: Bigger and faster: What will Amazon mean for metro Des Moines retailers?
The heavyweight retailer hosted hiring fairs in central Iowa earlier this month, seeking 60 workers for the Grimes delivery center. Grimes building division administrator Scott Clyce said the center — a facility that typically would employ 200 to 400 people — had already passed its final inspection.
"Right now, (the building is) still on par to be totally released to Amazon on (March) 27th," Clyce said. "As far as their actual doors opening up, that's going to be up to them."
A delivery station in Iowa City also opens this spring.
Wulfraat said the new fulfillment and delivery stations are part of a years-long plan for Amazon to control shipping from warehouse to doorstep.
"What Amazon is starting is they are developing, across the country, a network of delivery stations that enables them to perform last-mile delivery to major metro markets and all the areas in between," Wulfraat explained.
Amazon has been building its own logistics network, turning once-essential shipping partners like FedEx and UPS into delivery rivals. In some markets, the company's Amazon Logistics arm puts deliveries in the hands — and trunks — of independent partners. Morgan Stanley estimated in December that the company is already delivering 50% of its volume.
"We’re ... responding to customer demand and ensuring our fulfillment centers are close to customers so we can offer great Prime service and fast shipping speeds," Amazon spokesperson Jen Crowcroft said in an email to the Des Moines Register.
Amazon last year announced plans to reduce delivery time on free shipping for Prime members worldwide to one day from two. In a January report of fourth-quarter sales, Amazon CEO Jeff Bezos touted the company's success.
"We’ve made Prime delivery faster — the number of items delivered to U.S. customers with Prime’s free one-day and same-day delivery more than quadrupled this quarter compared to last year," Bezos said in the release.
Amazon announced in the same statement that net sales had increased 20% in 2019, as compared to 2018, and that more than 150 million people had signed up for the extra-cost Prime service worldwide. Wulfraat credits some of that to the company's emphasis on faster delivery.
"There’s a strong correlation between the fact that they're offering a faster service and that sales revenues are going up," he said.
Trinity Weatherall, a 17-year-old Indianola resident, said faster shipping would probably change her online purchasing habits.
"I'd be definitely shopping a lot more online," the high school junior said.
Drake University freshman Alec Bequette, 19, said he wasn't sure that quicker delivery would change his online shopping habits, but he acknowledged that it might make life more convenient for him and his classmates.
"I guess for textbooks it would be nicer, too, because a lot of us don't order them until class starts," the actuarial science and international business major said. "And then we have assignments from them that we can't do until we get our book."
But that faster shipping won't be free. Online shoppers in metro Des Moines who don't pay the $119 annual membership fee for Prime are unlikely to see next-day shipping become an option for them, even if the fulfillment center is just next door.
Jennifer Bolfik, a 39-year-old nursing assistant, said she orders online mostly from Walmart and Kohl's, which do not require a membership fee for free shipping on orders above a certain price. Aside from an incident when her 10-year-old daughter didn't get a dress in time for school picture day, Bolfik said products usually show up within two days.
► More: Bigger and faster: What will Amazon mean for metro Des Moines retailers?
"If I didn’t have to make an extra expense to be a member of Amazon, then yeah, for sure I would absolutely join," Bolfik said when asked if next-day shipping would change her shopping habits. "Just to go on the Walmart website or the Kohl’s website ... you don’t have to make the extra payment, and they’re pretty fast."
But Grella, the former Amazon development director and founder of Grella Partnership Strategies consulting firm, said even non-Prime customers will see some delivery improvements with the new center.
"Given Amazon’s leadership principle of 'customer obsession' and philosophy of working backwards from the customer would apply to both Prime and non-Prime members, it’s reasonable to assume, as the fulfillment and delivery network expands locally and regionally, that all customers will start to see improvements in delivery times," Grella wrote in an email.
Wulfraat said that even Des Moines metro residents who pay for Prime are unlikely to get the most premium of Amazon services: same-day merchandise and perishable grocery delivery at no extra cost. That's currently reserved for customers in more populous areas, like Chicago and Seattle.
Wulfraat said grocery service requires several smaller warehouses rather than a massive fulfillment center. And so far, same-day delivery hasn't reached Midwestern metros smaller than Kansas City, with more than 2 million people to metro Des Moines' 768,927.
But, Wulfraat said, even expanded next-day delivery makes Amazon a force.
“The ability to go that fast is limited to one company right now," he said. "No one else can do that on a national level. ... Right now, no one has come close to that.”
Katie Akin is a retail reporter for the Register. Reach her at email@example.com or at 515-284-8041. Follow her on Twitter at @katie_akin.
Article Link: https://www.desmoinesregister.com/story/money/business/retail/2020/03/27/amazon-fulfillment-center-change-des-moines-shoppers-bondurant-faster-shipping/4806209002/