Amazon Prime to Transition to One-Day Shipping
As if Amazon Prime wasn’t fast enough, the company announced plans to cut down its two-day shipping time to just one day through a new $800 million investment. Although these speedy deliveries have already begun in some areas, the goal is to make the one-day shipping a standard for all eligible Prime customers. Amazon CFO, Brian Olsavsky revealed the news on a conference call with analysts on Thursday, saying, "this is all about the core free two-day offer morphing into a free one-day offer.”
In addition to its two-day Prime shipping, Amazon also has several other ways to get packages out the door rather quickly. Many areas offer same-day deliveries, and a few even have one to two hour options. But many of Amazon’s peers (i.e. Target and Walmart) have caught up to the once superior two-day shipping standard, so it was time for Amazon to differentiate itself once again.
"I’m not surprised by it — they’re already delivering to the consumer in one day and faster — so I think that gives them confidence," he told Retail Dive in an interview," Jon Weber of L.E.K Consulting told Retail Dive. “There was a time when free two-day shipping was a massive difference — that superiority historically, that gap from the competition, removes choice in the mind of the consumer. Well if that’s narrowing — that’s a potential risk to Amazon."
Amazon said it would accomplish this feat with the help of its partners including the U.S. Postal Service, UPS, FedEx and a few others. The move to a one-day shipping standard does not reflect any intended shift on Amazon’s part to transition to using its own shipping infrastructure. It’s not to say however, that this won’t change down the line as Amazon is currently testing out its shipping service in several areas of the country.
"We’re going to be using all the levers we’re using now," Olsavsky added. "We’re definitely going to be needing the continued support of our partners."