June 25, 2025
Image Courtesy of Amazon
Why Is Amazon Expediting Delivery to Rural Markets?
Amazon plans to expand its same-day and next-day Prime delivery service to over 4,000 smaller cities and rural regions in the U.S. by the end of 2025.
The expansion will allow Amazon to reach “tens of millions” more U.S. customers, with Amazon particularly highlighting the capacity to deliver “everyday essentials,” including groceries and household goods, “within hours” to rural households.
Amazon said, “This expansion goes beyond speed — it’s about transforming daily life for rural customers, who typically live farther from brick-and-mortar retailers, have fewer product and brand choices, and face limited delivery options when shopping online.”
Amazon referred to these everyday items as “speed-critical” for delivery while noting that it has started offering a larger selection of such staples for same-day delivery to enable consumers to quickly stock up without needing to make an extra trip to the store. Amazon said, “No one wants to wait two days to receive paper towels, diapers, or dog food when they’ve run out.”
The world’s largest e-commerce company in April announced plans to spend over $4 billion by the end of 2026 to triple the size of its rural delivery network.
The rural push comes as Amazon’s delivery speed hit record levels in 2023 and 2024, and the number of items Amazon delivered the same or the next day in the U.S. increased over 30% so far this year compared to the same period last year. Amazon said the quicker delivery times led to groceries and household essentials growing more than twice as fast in the first quarter as all other categories in the U.S.
With Prime, members have access to unlimited free same-day delivery when spending over $25 at checkout.
The same-day delivery investment comes as third-party delivery platforms such as Instacart, DoorDash, and Uber Eats continue to partner with grocers and other retailers to support delivery within hours — for a fee.
Earlier this year, Walmart set a goal to be able to deliver to 95% of Americans within three hours by the end of the year. The discounter, according to Bloomberg, also recently began testing dark stores to speed online delivery.
“The battle for the rural last mile in America is intensifying,” Morgan Stanley analysts said in a note obtained by Investopedia. “As Kong (WMT) fights Godzilla (AMZN) in the battle for retail and eCommerce supremacy, the favored weapon of choice has often been delivery/logistics.”
Surveys show that consumers are often more interested in cheap or free over speedy delivery. A McKinsey survey of more than 1,000 U.S. consumers earlier this year found more than 80% will still buy an item when delivery takes four to seven days — as long as that delivery is free.
BrainTrust
Carlos Arámbula
Principal, Growth Genie Partners
John Hennessy
Retail and Brand Technology Tailor
Bob Phibbs
President/CEO, The Retail Doctor
Recent Discussions
Discussion Questions
What’s behind Amazon’s push to increase same-day and next-day delivery to rural regions?
How should Walmart and other retailers serving those regions respond?
Poll
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Because they see the roads at all the dollar stores and tractor supply have made, and they have the data to do even better than either one of those competitors
Amazon has lower penetration in rural areas, so it’s a huge untapped opportunity – especially so as provision from other retailers is relatively weak.
Why is Amazon going rural? Because someone has to do it! Dollar stores have slept on this opportunity. Walmart has made inroads. There is room for another big player.
The closure of local brick-and-mortar retailers provides Amazon with an opportunity for further growth. Think back to the function of Sears Catalogues in rural America years ago.
Quite an appropriate analogy, Carlos.
Rapid rural delivery is a “vehicle” for Amazon to widen its customer base. Yes, longer distances present a cost-to-serve challenge, but a combination of scale (more orders per trip) and drones (easier in the country than the city) could add up to opportunity.
I agree that the dollar stores are unlikely to compete effectively on this. Tractor Supply has a shot, although its assortment is much more limited. Walmart’s vast store footprint still provides it with a latent advantage, if it does the work to optimize its own process.
Rapid delivery is costly and unreliable. (I’m still waiting on an Instacart order from two days ago.)
Amazon is filling a void in its customer base, with rural areas representing the final frontier for e-commerce dominance. The company is racing Walmart for control of rural America by creating dependencies through integration into daily purchasing habits for “speed-critical” essentials.
Walmart’s goal of reaching 95% of Americans within three hours by the end of 2025 likely forced Amazon’s hand on timing. The company can now benefit from maturing infrastructure that finally makes rural unit economics viable.
Amazon strikes when technological capability, competitive landscape, and economic pressures align to create maximum strategic advantage. Move too early, and the economics don’t work. Move too late, and Walmart owns rural America.
As a result of offering faster delivery options, the company intends to expand its customer base and improve its competitive edge. Convenience and efficiency are driving this trend, especially in areas where delivery times were previously longer. Amazon strives to enhance customer satisfaction and loyalty by investing in infrastructure and logistics.
Extending their reach to rural America means more new customers who will pay the annual fee to become a Prime Member, where Amazon can offer all of its goods and services on an oasis venue where none are available right now.
Rural areas provide the next frontier for Amazon, given limited competition with much less variety available from those retailers.
Suggested in this article is a limited assortment offering. The article references, “speed-critical” items. Limiting inventory to high velocity items is a smart approach for a rural delivery solution. Amazon has the data to identify which high velocity items to carry by region to satisfy the highest rural demand.
Hasn’t market share always been a primary driver at Amazon? Market share first and profitabiity second…???
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Because they see the roads at all the dollar stores and tractor supply have made, and they have the data to do even better than either one of those competitors
Amazon has lower penetration in rural areas, so it’s a huge untapped opportunity – especially so as provision from other retailers is relatively weak.
Why is Amazon going rural? Because someone has to do it! Dollar stores have slept on this opportunity. Walmart has made inroads. There is room for another big player.
The closure of local brick-and-mortar retailers provides Amazon with an opportunity for further growth. Think back to the function of Sears Catalogues in rural America years ago.
Quite an appropriate analogy, Carlos.
Rapid rural delivery is a “vehicle” for Amazon to widen its customer base. Yes, longer distances present a cost-to-serve challenge, but a combination of scale (more orders per trip) and drones (easier in the country than the city) could add up to opportunity.
I agree that the dollar stores are unlikely to compete effectively on this. Tractor Supply has a shot, although its assortment is much more limited. Walmart’s vast store footprint still provides it with a latent advantage, if it does the work to optimize its own process.
Rapid delivery is costly and unreliable. (I’m still waiting on an Instacart order from two days ago.)
Amazon is filling a void in its customer base, with rural areas representing the final frontier for e-commerce dominance. The company is racing Walmart for control of rural America by creating dependencies through integration into daily purchasing habits for “speed-critical” essentials.
Walmart’s goal of reaching 95% of Americans within three hours by the end of 2025 likely forced Amazon’s hand on timing. The company can now benefit from maturing infrastructure that finally makes rural unit economics viable.
Amazon strikes when technological capability, competitive landscape, and economic pressures align to create maximum strategic advantage. Move too early, and the economics don’t work. Move too late, and Walmart owns rural America.
As a result of offering faster delivery options, the company intends to expand its customer base and improve its competitive edge. Convenience and efficiency are driving this trend, especially in areas where delivery times were previously longer. Amazon strives to enhance customer satisfaction and loyalty by investing in infrastructure and logistics.
Extending their reach to rural America means more new customers who will pay the annual fee to become a Prime Member, where Amazon can offer all of its goods and services on an oasis venue where none are available right now.
Rural areas provide the next frontier for Amazon, given limited competition with much less variety available from those retailers.
Suggested in this article is a limited assortment offering. The article references, “speed-critical” items. Limiting inventory to high velocity items is a smart approach for a rural delivery solution. Amazon has the data to identify which high velocity items to carry by region to satisfy the highest rural demand.
Hasn’t market share always been a primary driver at Amazon? Market share first and profitabiity second…???