Market Overview

Amazon Expanding And Improving Same-Day Delivery

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One big advantage brick-and-mortar retailers have had over Amazon (NASDAQ: AMZN) and other e-commerce companies is “immediacy.” Customers could walk into a store, see something, buy it, and take it home. With Amazon, they have to place an order and wait for the package to arrive – anywhere from two days to two weeks later.

To counter this, Amazon said it would expand its fledgling same-day delivery service and improve it to make using it easier, according to The Wall Street Journal. The company also said it would lower the delivery fee for many items ordered by Amazon Prime members.

The cities of Dallas and San Francisco have been added to 10 other cities that have been offering same-day delivery, bringing the total to an even dozen metropolitan areas across the U.S. that offer Amazon same-day delivery.

Related: Report: Amazon 3D Smartphone Coming in June

Another improvement, according toCNET, was the inclusion of a “Get it Today” search filter that automatically displays products that qualify. Initially the “Get it Today” filter would be available in Seattle, San Francisco, Los Angeles and Phoenix only. Amazon said it would eventually be available in all 12 same-day cities.

The fixes are not perfect. For one thing, Amazon’s same-day delivery is not available everywhere. Even with expansion, only a dozen cities - Baltimore, Boston, Chicago, Dallas, Indianapolis, Los Angeles, New York City, Philadelphia, Phoenix, San Francisco, Seattle and Washington, D.C. - offer the service.

Also, even though the company has instituted later “deadlines” for same-day delivery in some locations, others still require that an order be placed as early as 8 a.m. (New York City) or even 7 a.m. (Philadelphia) for delivery the same day by 9 p.m.

Pricing for the service, Amazon said, depended on whether or not the customer was a member of its Amazon Prime service. Prime members would pay $5.99 for up to about 150 pounds. This represented a reduction from the $3.99 per item fee Prime members paid previously.

Non-Prime customers would pay $9.98 for the first item and 99 cents for each additional item.

One reason for the measured expansion of same-day service was the fact that Amazon wants to – eventually – cut out the shipping middleman and use its own delivery network, according to The Wall Street Journal. For now, United Parcel Service (NYSE: UPS), FedEx (NYSE: FDX) and the US Postal Service deliver most orders to customers.

Amazon CEO Jeff Bezos also famously told 60 Minutes that the company also wanted to get into the “drone delivery” business at some point.

At the time of this writing, Jim Probasco had no position in any mentioned securities.

Posted-In: Amazon Amazon Prime fedex Jeff BezosNews Wall Street Journal Events Media Best of Benzinga

 

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