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More than 20 years after it redefined fast shipping, Amazon is preparing to raise the bar on consumer expectations again by offering to fulfill customers\u2019 most urgent product needs in a half-hour or less for an extra fee.<\/p>\n
The company, which revolutionized online shopping in 2005 with two-day deliveries for Prime members, is rapidly opening small order-processing hubs in dozens of U.S. and foreign cities to cater to shoppers who can\u2019t or don\u2019t want to wait for cough medicine to relieve flu symptoms or tomatoes for tonight\u2019s dinner salad.<\/p>\n
The ultrafast service, called Amazon Now, first launched in India last June. Amazon says 30-minute deliveries now are also available in urban areas of Brazil, Mexico, Japan, the United Arab Emirates, the United Kingdom and the United States.<\/p>\n
The mini-warehouses devoted to Amazon Now are about the size of a CVS drugstore. They stock about 3,500 products for expedited delivery, including beer, diapers, pet food, meat, nonprescription medications, playing cards and cellphone charging cables.<\/p>\n
\u201cWe know that customers love speed and always have,\u201d Beryl Tomay, Amazon\u2019s head of transportation, told The Associated Press on Monday. \u201cWhat we see customers doing, when we offer faster speeds, are they purchase more from Amazon. And Amazon becomes more top of mind for that or other types of items as well.\u201d<\/p>\n
In the U.S., the company first tested Amazon Now in Seattle, the home of its headquarters, and in Philadelphia. Most residents of Atlanta and the Dallas-Fort Worth area now have access as well. The service is live in Houston, Denver, Minneapolis, Phoenix, Oklahoma City, and Orlando, Florida, and is expected to be launched in dozens of other cities, including New York, by year-end, Amazon said.<\/p>\n
The service charges for Amazon Now start at $3.99 for Prime members, who pay an annual fee of $139, and $13.99 for non-members. A $1.99 small basket fee applies to orders under $15, Amazon said.<\/p>\n
The company\u2019s bet on a need for speed also comes as some consumers are rebelling against rushed deliveries as they weigh the potential\u00a0impact on the environment\u00a0and the workers tasked with preparing orders at a rapid rate.<\/p>\n
Amazon\u2019s approach<\/p>\n
A relentless focus on speed helped Amazon build a logistics and e-commerce empire. After it made two days the new delivery time normal, Amazon moved into one-day and same-day deliveries for its\u00a0Prime members. This spring, the company began making 90,000 products available in\u00a0one hour or three hours\u00a0at an extra cost.<\/p>\n
The scaled down and sped up microhubs that are designed to handle 30-minute orders represent another step in Amazon\u2019s pursuit.<\/p>\n
Only a handful of people prepare orders from aisles of shelves in the 5,000- to 10,000-square-foot facilities, unlike the sprawling fulfillment centers storing millions of items where Amazon employs a mix of human workers and robotics to pick and pack orders.<\/p>\n
Amazon tailors the product inventory to each location and uses artificial intelligence and other technology to analyze what customers buy, as well as when and how often. The most popular U.S. purchases so far include soap, toothpaste, mouthwash, toilet plungers, bananas, limes and wireless earbuds, Amazon said.<\/p>\n
The competition<\/p>\n
Amazon\u2019s attempt to up the instant gratification ante provides direct competition to\u00a0on-demand food delivery\u00a0platforms like Instacart, Uber Eats,\u00a0DoorDash\u00a0and Grubhub, which don\u2019t have\u00a0the scale\u00a0of the e-commerce titan, according to independent retail analyst Bruce Winder.<\/p>\n
\u201cWhat Amazon brings is their prowess in supply chain,\u201d Winder said.<\/p>\n
These smaller companies said they don\u2019t see Amazon as a threat, though, citing the hundreds of thousands of items they are able to deliver to users\u2019 doorsteps by partnering with various merchants and restaurants.<\/p>\n
\u201cDoorDash has a mission to empower grocers and retailers and augment their existing footprint, not to replace them,\u201d DoorDash spokesperson Ali Musa said in an emailed statement. \u201cWe win only when they win, which is how we can offer over half a million grocery and retail items in under an hour across the country.\u201d<\/p>\n
Amazon also is in a race with Walmart to become\u00a0the retailer\u00a0that reliably gets orders to online shoppers in under an hour.<\/p>\n
For an additional $10 on top of standard delivery charges, shoppers can place Walmart Express Delivery orders from among more than 100,000 products that are guaranteed to arrive in an hour. Many customers, however, are receiving the items under 30 minutes, Walmart CEO John Furner told analysts in February.<\/p>\n
Domino\u2019s cautionary tale<\/p>\n
Companies have promised deliveries in 30 minutes or less before, but the landscape also is littered with failed attempts to break the speed barrier.<\/p>\n
The COVID-19 pandemic produced a flurry of companies that promised 10- to 15-minute grocery deliveries from microwarehouses in dense neighborhoods, according to Sucharita Kodali, an analyst at market research firm Forrester Research.<\/p>\n
But soaring operating costs, low customer loyalty and the drying up of investor money ultimately caused most to fail before the\u00a0pandemic was over, analysts said.<\/p>\n
Domino\u2019s in 1984 pushed a guarantee that customers would receive their pizzas for free if they weren\u2019t delivered in under a half-hour. The company amended the \u201c30 minutes or it\u2019s free\u201d policy after two years, providing only a $3 discount for late deliveries.<\/p>\n
The promotion helped Domino\u2019s win market share, but it ended up tarnishing the company\u2019s reputation. It dropped the guarantee in December 1993 after a string of crashes and lawsuits involving drivers racing to meet the deadline.<\/p>\n
Brad Jashinsky, a retail analyst at information technology research and consulting firm Gartner, said he thinks Amazon should take the pizza chain\u2019s experience as a cautionary tale.<\/p>\n
\u201cYou get in trouble when you start overpromising something like that,\u201d he said.<\/p>\n
Amazon won\u2019t be making any time guarantees and instead plans to keep customers who chose the 30-minute delivery option updated on the progress of their orders, Tomay said.<\/p>\n
\u201cThere\u2019s no rushing either in our building workers or the gig workers,\u201d she said.<\/p>\n
Taking it slow<\/p>\n
Kodali thinks Amazon will need a lot of people placing orders around the same time from the same or adjacent apartment buildings for the 30-minute service to be cost-effective.<\/p>\n
Consumers may appreciate rapid receipt of products like toilet paper and batteries, but retailers and logistics experts said they also see some online shoppers, especially members of Generation Z, choosing no-rush shipping for products they don\u2019t need in a hurry.<\/p>\n
Amazon for several years has invited customers to skip one- or two-day delivery and to receive their orders on the same day in as few parcels as possible. Consolidating orders into fewer packages by electing to have them delivered at the same time cuts down on boxes, shipping envelopes and fuel use, analysts said.<\/p>\n
\u201cThe millennials who came to age in an era that was on fast delivery came to expect it de facto, whereas \u2026 Gen Z is more accepting of a slower speed than previous generations before them,\u201d said Darby Meegan, a general manager at Flexport, a supply chain and logistics company that fulfills orders for thousands of online merchants.<\/p>\n
Still, Amazon executives have cited positive early results for Amazon Now in India, where they said Prime members tripled their requests for 30-minute deliveries once they started using the service.<\/p>\n
Amazon Now also is attracting more repeat American customers, Tomay said.<\/p>\n
\u201cIt\u2019s in early days and time will tell,\u201d she said. \u201cI think that it will be interesting to see how it evolves.\u201d<\/p>\n
#Amazons #promise #30minute #delivery #collides #memories #Dominos #drivers #crashing #late #1980s<\/p>\n","protected":false},"excerpt":{"rendered":"
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