Amazon's Move to One-Day Shipping

Hey BFAds Fans,

In a world of one-touch ordering and competitive free shipping options, many of us are not up to leaving the house to go shopping anymore. Most of us would rather spend time cleaning (Kon-Mari anyone?), gardening, gaming, or spending time with our family and friends.

Driving to a store, using gas to get there, and then stand in line for around twenty minutes at checkout is a chore that most of us are happy to eliminate. We prefer to just pick up our mobile devices and order the item we need, knowing that in just a few days it'll arrive at our doorstep - and we can keep our comfy pants on and stay at home.

Amazon's CFO has recently made an announcement in a quarterly earnings conference call that could raise the bar for other retailers, and make it hard to find a reason to drive to a physical store.

"So we have -- we're currently working on evolving our Prime free two-day shipping program to be a free one-day shipping program. We're able to do this because we've spent 20-plus years expanding our fulfillment and logistics network, but this is still a big investment and a lot of work to do ahead of us. For Q2 guidance, we've included approximately $800 million of incremental spend related to this investment." - Brian Olsavsky, CFO of Amazon

Amazon has already been offering free one-day shipping, free same-day shipping, and free 2-hr. delivery on a lot of items in most city areas. It doesn't seem like big news, except that it actually means that suburban and rural areas will now also be able to get items much faster.

"...this is all about the core free two-day offer morphing into -- or evolving into a free one-day offer. We've already started down this path. We've, in the past month, significantly expanded our one-day eligible selection and also expanded the number of zip codes eligible for one-day shipping." - Brian Olsavsky, CFO of Amazon

The free one-day shipping is meant to take the place of the default free two-day shipping, meaning that Prime Members can now get the touted 'Over 100 million items that arrive two business days after they ship' with no minimum order threshold an entire day earlier. Let's be honest, the real reason we're going to use it is for the 'I-totally-forgot-it-was-their-birthday!' gifts.

Amazon is upping the competitive bar even more by partnering with Kohl's for returns. Starting July, Kohl’s will accept eligible Amazon items, with or without a box or label, and then return them for Amazon customers for free.

We are excited to see how Amazon’s biggest competitors, Walmart , Target , & Rakuten will respond in order to compete. They may just start offering better incentives to use their Restock and Curb-side pickup and delivery services. We'll definitely keep our eyes peeled to see which retail giant offers up the better deal this year.

With both Prime Day and Black Friday, maybe we'll see some better incentives to select the 'no-rush' shipping at checkout to handle the waves of orders coming in. It's important to note that this program will still take some time to fully roll-out and become the every-day standard, as not only will this impact the services delivering packages to our homes, but also the warehouse employees.

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May 1, 2019
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