Amazon Same-Day Prime Delivery Expands to 6 New Cities

Amazon Expands Same-Day Delivery to Additional Cities

This morning, Amazon revealed an expansion of its expedited, same-day delivery service to six further U.S. metropolitan areas. The retailer has been actively refining its same-day delivery capabilities over the past year, and this service now provides consumers across numerous markets with access to approximately 3 million products available on Amazon.com, delivered within a matter of hours.

Investment in Local Fulfillment

To facilitate this faster delivery, Amazon has invested in what they term “mini-fulfillment centers.” These facilities are strategically located closer to customer residences in select U.S. markets, beginning with cities like Philadelphia, Phoenix, Orlando, and Dallas.

Initially, customers in these areas could select from a dozen different merchandise categories, encompassing Baby products, Beauty & Health items, Kitchen & Dining supplies, Electronics, Pet Supplies, and more. The service’s reach was further extended in November 2020 to include Nashville and Washington, D.C., as the pandemic continued to influence Amazon’s operations.

New Markets and Delivery Timelines

The current expansion introduces same-day delivery to Prime members in Baltimore, Chicago, Detroit, Tampa, Charlotte, and Houston, increasing the total number of served markets to twelve. Amazon states that shoppers in these locations can place orders online throughout the day and receive items within as little as five hours.

Furthermore, customers have the option to place orders by midnight to receive them the following morning. This provides significant convenience for shoppers needing items quickly.

Delivery Costs and Prime Membership

The service remains free for qualifying orders exceeding $35. A fee of $2.99 applies to orders under $35 for Prime customers, while non-members are charged $12.99. Prime membership itself costs $12.99 monthly or $119 annually.

Delivery Time Commitments

The promised delivery timeframes are consistent with those announced last year when Amazon initially detailed its plans to accelerate Prime delivery. Orders placed between midnight and 8 AM are scheduled to arrive by 1 PM.

Orders placed between 8 AM and 1 PM will arrive by 6 PM, while those placed between 1 PM and 5 PM are expected by 10 PM. Finally, orders submitted between 5 PM and midnight will be delivered overnight by 8 AM.

Competitive Landscape

Expedited same-day delivery has become a key differentiator for Amazon in its competition with retailers like Walmart and Target. Both Walmart and Target leverage their extensive brick-and-mortar networks to offer quicker service through same-day order pickup, curbside pickup, and same-day delivery options.

While Walmart utilizes third-party partnerships for its Express delivery service, primarily focused on groceries, Target acquired Shipt in 2017 to internalize its fast delivery capabilities.

Amazon’s Strategic Acquisitions

In response to increasing competition, Amazon has been acquiring smaller warehouse spaces within major metropolitan areas, including the six newly added markets, as well as larger cities like New York and surrounding suburban areas.

The 2017 acquisition of Whole Foods for $137.7 billion was also strategically motivated, not only to enhance Amazon’s presence in the online grocery sector but also to capitalize on Whole Foods’ established retail footprint.

Prime Now Retirement

As Amazon accelerates the speed of deliveries under the Prime program, it is phasing out its older Prime Now service, with a final retirement date of August 30. This separate app previously allowed customers to access items within one to two hours for an additional fee, applicable to orders below $35.

Recent Earnings and Outlook

This announcement follows Amazon’s recent earnings report, where the company fell short of Wall Street’s revenue expectations and provided a less optimistic outlook for the upcoming quarter. Amazon attributed this to challenging comparisons with the period encompassing COVID-19 lockdowns in 2020.

The company reported revenue of $113.08 billion and earnings of $15.12, compared to anticipated figures of $115.2 billion and $12.30.

Update, 8/4/21, 11 am pt: Clarification provided regarding the acceleration of Prime Now’s retirement date from year-end to August 30, coinciding with the full closure of its website and app.