More Apparel Retailers Getting into Logistics Business

It’s easy to forget that Amazon started as an online bookseller without any bricks-and-mortar warehouses.

The e-commerce retail giant probably should be looking over its shoulder at the growing number of retail chains—all of which have been busy in the past two years building out national networks of fulfillment centers—that are taking a page out of Amazon’s strategic playbook and leveraging their warehouse footprints to offer shipping services to smaller businesses.

These players may have a bigger goal in mind than simply leveraging a portion of their warehouse assets, like the estimated 40% share of Amazon warehouses the e-retailer reserves for independent sellers—they may be thinking of something along the lines of Amazon Web Services (AWS).

AWS began as excess data-processing space in Amazon’s e-commerce server farms and became the largest cloud computing platform in the world. It’s not too far-fetched to think that a new, heavily automated e-commerce distribution network may emerge in the retail sector as a challenger to the behemoth.

Two specialty apparel retailers have announced ventures with digital inventory platforms to offer their distribution networks as shipping outlets for smaller businesses—and one of them is offering one-day deliveries of orders.

The latest to join the parade is Gap, which has followed up a low-key announcement last year of its new logistics business—called GPS Platform Services—with news of a game-changing partnership with a company that, along with Amazon and FedEx, has experience running one of the busiest logistics networks in North America: UPS.

Gap is teaming with UPS’ Ware2Go digital platform to offer small shippers access to Gap’s network of 35 fulfillment center for outsourced distribution services, including use of Ware2Go’s inventory tracking platform.

Gap says it is aiming to offer one-day “click-to-door” fulfillment to customers of businesses utilizing GPS Platform Services. These companies will have access to supply chain capabilities “previously only available to billion-dollar brands,” Gap said in a press release.

The partnership said it also is aiming at international companies that want to expand their US market share without investing in fulfillment infrastructure. Gap said it is investing $700M in improved automation, speed and efficiency at its fulfillment centers.

Last year, Quiet Platforms, the logistics arm of American Eagle Outfitters, launched a nationwide delivery network that aims to give small and mid-sized retailers access to more than 40 carriers covering all US postal codes.

The network, which will use the company’s “plug-and-play,” open-sharing tech platform to optimize deliveries in real time and lower costs for shippers, is partnering with DHL to offer a “date-definitive” delivery service. Quiet Platforms says the system can reduce delivery times by one to two days and lower costs by up to $1 per parcel.

In December, JLL announced a partnership with Quiet Platforms to expand American Eagle’s edge fulfillment network, opening new distribution centers across the county that will use a flexible rent-as-a-percentage-of-revenue model for logistics real estate.