Amazon’s Prime membership program has reached a new milestone, with nearly 60% of orders in the top 60 U.S. metropolitan areas arriving on the same or next day. This marks an increase from approximately 50% in the previous year. The e-commerce giant has successfully delivered over two billion items at this accelerated pace to global Prime members.
Prime’s Evolution and Competitive Edge
Launched in 2005, Amazon Prime revolutionized online shopping with a promise of free two-day shipping on over a million items for an annual fee of $79. Fast forward to 2024, the fee has climbed to $139, but the service now encompasses a staggering 300 million items. Amazon’s commitment to making same- and next-day delivery the norm is evident in its plans to double the number of same-day delivery sites in the U.S. in the coming years.
Amazon CEO Andy Jassy emphasizes the strategic advantage of speed, noting that rapid delivery increases customer reliance on Amazon for their shopping needs. This has contributed to a significant growth in the company’s everyday essentials business, which saw a year-over-year increase of over 20% in the last quarter of 2023.
Efficiency and Cost Reduction
In a surprising twist, Amazon’s swift delivery model may lead to cost savings. In 2023, the company restructured its fulfillment network into eight regions, each stocking nearly all SKUs. This reduced long-haul transportation and cut delivery costs by over 45 cents per unit compared to the previous year.
Competitive Landscape
Amazon’s advancement has not gone unmatched. Walmart introduced a delivery service with times as short as 30 minutes, and Target launched a loyalty program offering same-day delivery for orders over $35 within an hour. Both competitors utilize their extensive store networks to expedite deliveries to local consumers.
For a detailed look at Amazon‘s delivery strategy and its impact on the retail industry, the full blog post can be accessed here.
