Amazon same day delivery squarely aimed at brick-and-mortar rivals

Amazon same day delivery squarely aimed at brick-and-mortar rivals

Summary: Amazon is using its distribution, information technology and shipping prowess to try and gain sales from brick-and-mortar retailers all the way up to Christmas.As Amazon continues to grow its rivals won't be Google and eBay as much as your local Wal-Mart, Target and Kohl's.

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Amazon is using its distribution, information technology and shipping prowess to try and gain sales from brick-and-mortar retailers all the way up to Christmas.

As Amazon continues to grow its rivals won't be Google and eBay as much as your local Wal-Mart, Target and Kohl's. Enter Amazon's expediting shipping efforts.

The company on Thursday said it will provide same-day delivery in seven cities---New York, Philadelphia, Boston, Baltimore, Las Vegas, Seattle and Washington D.C.---with plans to add Chicago, Indianapolis and Phoenix in the months ahead.

Amazon Prime customers will pay $5.99 per item for same-day delivery while others will pay a wide range of higher fees (rate card). This move could really help for those last minute items---Amazon says it will offer same-day shipping Christmas Eve for orders as late at 1 p.m. PST.

The rub is that Amazon's shipping charges are steep, but it's likely the company will lower fees over time. Goldman Sachs analyst James Mitchell noted:

We expect same-day deliveries to only moderately boost sales volumes given onerous shipping charges, but the ability to make same-day deliveries (even on December 24) should further differentiate Amazon in the eyes of consumers. Amazon may reduce same-day charges over time as its fulfillment network becomes accustomed to faster deliveries.

Indeed, if Amazon can lower fees it will be able to use shipping as a weapon to cut e-commerce "friction." J.P. Morgan analyst Imran Khan notes:

We see the service as another step Amazon is taking to shorten customers’ waiting time between order and delivery, and to lower the frictions involved in eCommerce. When Amazon introduced Prime, it raised the order frequency for Prime shoppers—and we think the new delivery option could be one more lever for increasing order frequency.

Topics: Amazon, Browser, E-Commerce, Enterprise Software

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10 comments
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  • Availability in Canada?

    Probably will be available in Canada on the 11 of September 3010 or about at the same time as the current version of the International Kindle.
    Ceridan
  • Amazon is the best

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  • RE: Amazon same day delivery squarely aimed at brick-and-mortar rivals

    I love Amazon but, I doubt I will need same day service. I also ready pay $80 a year for prime and 2 day delivery is fine with me. I can't see a time where I would need a item today from them.

    I sign up for prime when I order a $132 DVD media shelf unit that was going to cost $30 and take 5 weeks. They offer 2 days with a free 30 day Prime membership.

    The shelf and all the stuff I got since paied for the membership. I am so please with it I plan to renew next year.
    Randalllind
    • Prime Rules!!!!

      I, too, use Prime. It paid for itself on the first 2 orders. And upgrading to overnight for $3.99 is more than sufficient. Love the service and rave about it every time I tell someone that I made a purchase on Amazon.
      jbjtkbw00
  • Super Saver is the way to go

    I hardly ever pay for shipping at Amazon. I plan my purchases so that I always spend at least $25 on an order and so that the shipping time is seldom an issue. I have always gotten my products within a few days and have never had to wait more than a week. I have yet to see a product that professes a long lead time, that is available in two days to Prime customers.

    I buy a lot at Amazon and have saved thousands in shipping over the years by judicious planning.
    tradergeorge
  • RE: Amazon same day delivery squarely aimed at brick-and-mortar rivals

    Love Amazon.com - who goes to B&M stores - LOL
    Kohl's lost tons of MVC customers after taking away free shipping. Kohl's Fans NOT http://www.topix.com/forum/topstories/TN7EGU33PE349AVLG
    cee-cee witt
  • Who cares what goldman sachs says

    Who give a damn what a bunch of thieving morons says about anything. GS is nothing but a bunch of stealing amoral greedopaths worthy only of a jail cell and indentured slave-hood until their debt to society is paid in full.

    The sooner the unregulated gambling casino called wall st. is closed the better.
    Reality Bites
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