- Pint of Häagan-Dazs Chocolate Peanut Butter Ice Cream
- Samsung 50 Inch Television
- Housemade Burrata from Eataly
If you live in downtown Chicago the four items above can be in your hands within 60 minutes delivered by a friendly courier working for Amazon Prime Now.
Amazon Prime Now, introduced in early 2015, is the next iteration of the popular Amazon Prime. Approximately 25,000 popular products, including items from local grocers and restaurants, can be delivered within one hour. The service is offered in major United States metro areas and select international cities. Prime Now is complimentary for Amazon Prime members and as I recently discovered there is no catch, except how quickly you want the item(s) to arrive. One hour delivery is $7.99 extra, but delivery as fast as two hours is free. Items are delivered in Prime Now labeled paper bags or small cooler bags. The only small print, orders must exceed $20.00 and Amazon recommends a small tip (billed during purchase, not cash) for the courier who delivers your products.
This ability for Amazon to deliver tens of thousands of products in as little as one hour is reshaping the shopping landscape. Amazon has invested heavily in conquering the complexity of the last mile and they have the capital, technology, and Jeff Bezos’ will succeed. Per a survey by Cowen & Co analyst John Blackledge, a quarter of Amazon Prime user have tried Prime Now at least once. For a product offering still in development stage, Amazon is building a viable tool.
Other companies over the years aimed to be profitable in this space, most recently PostMates, a courier service like Amazon Prime Now. Amazon is miles ahead of their competition because they have an easy to use sales platform, unlimited brand awareness, and most importantly the Prime Now service does not need to be a revenue source for the Seattle-based company. This final point is extremely important, PostMates whole business model is courier services, but for Amazon this is not even a line item in their Annual Report. Amazon repeatedly launches money loosing products or services to gain a foothold in a new space.
Retailers, Wal-Mart and Target, who have the capital to lose are struggling to emulate the speedier delivery. Amazon’s commitment to building an enviable logistics network and warehouse strategy around major metro areas dwarfs their competition and an almost insurmountable lead. The treasure trove of customer data Amazon accrued the past two decades enables them to properly stock the small warehouses and anticipate the unpredictable behaviors of their customers. Amazon constructed a $107B e-commerce behemoth by living on razor thin margins. Amazon boasts the resources and capital to overcome the difficulties of the fast delivery and overwhelm their competition. The ability to order and receive a prepared meal, bottle of wine, and flowers from Eataly before you leave the office on Friday night alters the landscape of shopping and makes the potential of Prime Now endless.
Amazon Prime Now removes the barrier of time and distance for millions of urban customers. Consumers have the ability to order products typically purchased at big box stores or other retailers, their weekly grocery items, or a bowl of pasta in a period only a few years ago we thought impossible. Retailers can overcome Amazon’s continued reach into people’s lives by delivering greater value and a superior customer experience. Through Amazon Prime, the retailer continues to design novel strategies to make them the only shopping platform customer’s desire.
Thank you for reading.