Amazon: Get it (almost) right now
What’s better than two day, one day, or even same day delivery? How about one hour delivery? If you live in Manhattan, that’s the promise of Amazon’s new program called Prime Now.
Amazon announced yesterday that its Prime members will have the ability to get 25,000+ products ordered via a mobile app delivered within the hour. Members must download the Prime Now app on iOS or Android devices. The service is available seven days a week, between 6:00 a.m. and midnight. Apparently relying on cyclists, two hour delivery is free, and one hour delivery costs $7.99. The service is apparently geared towards popular items like "paper towels, shampoo, books, toys and batteries."
Prime Now is only available in one zip code (10001) but will expand to other parts of New York City soon and additional cities in 2015.
![[Image: Amazon Prime Now]](/public/images/discussions/17980/prime-now-still.jpg)
TechCrunch posits that Amazon is offering this service to stay competitive with startups and services like Uber, which offer similar and possibly lower priced services already. PCWorld theorizes that Amazon is trying to create immediate purchase gratification, similar to what consumers get from in-store purchases.
Amazon’s SVP of Worldwide Operations, Dave Clark, said in a press release, "There are times when you can’t make it to the store and other times when you simply don’t want to go."
For now, the distribution hub for these orders will be Amazon’s new building on 34th Street.
- Amazon Introduces Prime Now: One-Hour Delivery on Tens of Thousands of Daily Essentials Exclusively for Prime Members – Amazon
- Amazon Brings One-Hour Delivery To NYC With Prime Now – TechCrunch
- Amazon launches Prime Now, a one-hour delivery service kicking off in Manhattan – Venturebeat
- Amazon is Doing Free Two-Hour Delivery in NYC for Prime Subscribers – Business Insider
- Amazon Prime Now delivers your order in an hour, but only in Manhattan for now – PC World
Discussion Questions
Do you expect city dwellers to take to Amazon Now? Does a one-hour delivery service greatly improve the viability of CPG e-commerce?
Honestly, do you think this is any more than a gimmick? And do you really think Amazon would make money with a delivery fee that low?
This might sound harsh, but I think it’s pretty similar to stories about drone deliveries and robots in the warehouse. Good PR (sort of), diversionary with the hope that shareholders will give the company a flyer on profits for yet another quarter or two.
I think Amazon is experimenting to better understand the demand patterns and economics of offering this level of convenience. As noted, Postmates, Instacart, Uber and others are offering faster delivery than Amazon.
Free two-hour delivery on “tens of thousands of items” could be a game-changer, but I’m curious to see whether Amazon integrates Prime Now with Fresh. Meals, perishable goods and other products purchased for immediate consumption seem to benefit more from get-it-now convenience vs. shelf-stable products.
I can probably wait a few days for more shampoo, razors, batteries or cereal. But if my options in Prime Now markets are to wait two days for free Prime delivery or wait two hours for free Prime Now delivery, you can guess which one I’m picking (assuming unattended deliveries are an option).
I’m not sure how those economics compare, but I’m sure Amazon is about to learn a lot that will inform its plans for expansion or M&A in this area.
Until Amazon fully implements drone-delivery I guess this is the next best option. This is a nice convenience for those consumers who have some challenge such as parents with newborns, etc. The test is whether this service will be profitable, spur consumers to become Prime members, buy CPG items online and be willing to pay shipping for items that are rather price-sensitive.
Free two-hour delivery. Can’t wait until it comes to 10022!
This is simply another one-upsmanship in the PR battle to get your soundbite and name into the media machine. It’s simply not a viable business model at the suggested rates. Nor is it scalable in any practical way. Retailers and brands need to concentrate on addressing core expectations of shoppers. These announcements get Amazon’s name into the daily news but doesn’t translate into anything of substance for the shopper.
This might be a great service for Walgreens or CVS Health for prescription deliveries.
How big city dwellers respond will utimately depend on the success of the service. If bicycles are the main delivery vehicle, I would expect limits on product sizes and margin. So probably not paper towels. How many things can people be in a big rush for, anyway?
Regarding competing with Uber, I think this is something else. Maybe a step toward a partnership? Or more?
The move is pretty reactionary (especially for the New York market), and not likely to be a game-changer for Amazon or CPG e-commerce. For Amazon, I don’t know that Now is going to drive new Prime membership, which ultimately has to be the goal.
Good luck to you who use it. Call me pessimistic, but I do not see it working past the holidays if it makes it that far.
Amazon is further proving that it is the retailer to go to for convenience. Online shoppers like the convenience of buying and then receiving. If they wanted it now, they would go to the store. Amazon is creating convenience. People will pay for convenience. It will be interesting to see if it works. Standby!
For those unfamiliar with the details of living in Manhattan, the most successful merchants are those that cater to this very unique American lifestyle: Compact kitchen appliances, compact everything for that matter, mostly walk-up trade, etc. This is yet another step in satisfying this special consumer, with the proximity of people living around each other, so therefore no long distances to travel. I was once told that some 15 percent of the U.S. population lives within 50 miles of Manhattan. I think people living on that island will take advantage of this service.
As far as CPG e-commerce goes, there is already a tidal flow of Direct-to-Consumer (D2C) commerce happening globally as we speak. Again, this service offers another channel for CPG companies to capture the consumers’ attention directly.
Last year it was drones (does anyone really think that they’ll be getting packages via drone?) and this year it’s free one-hour delivery in a single zip code. Kudos to Jeff Bezos for keeping his company in the headlines—now let’s see if he can turn a profit.
I do think city dwellers will take to getting deliveries in an hour and for free. Who wouldn’t? My question is—Amazon, when are you going to do something to make yourself more profitable? This ain’t it!
Actually I do think there is a need to have same-day deliveries when the need is immediate, however I also think the consumer is more than willing to pay for the service if they need it. So why bypass an option that actually pays?
For my two cents.
Don’t know if this is a long-lasting delivery method but I do know that Amazon is using its agile approach (both in technical development and on the business side) to test many different ideas. They’ll keep/drop/modify as needed to improve the customer experience. In a world where things change quickly and there’s a lot of debate about the right answer (witness the comments on this page), that’s a great approach. Other retailers should figure out how to implement these kinds of processes.
As Bezos says: “Failure is cheap, errors of omission are costly.”
Let’s see if I got this right—24/7 deliveries within one hour. That means I don’t need a car, taxi, bus or train unless I need to get to work or travel to visit sites and people. Hold it, I can Skype the people and the internet has photo and video of just about everything I might want to visit. Therefore the consumer tradeoff is between service fees and car expense. Since few people in zip code 10001 own cars this is not an issue, but move it to the suburbs and the car makers may not like it.
Time is currency. Convenience is a brand asset.
There is another story here too, for retailers. Amazon is leveraging the dense population base. What else can you leverage?
I recently ran into a colleague I worked with at my first marketing research job. I recalled how we were always worried about tight deadlines and getting surveys distributed around the country via mail on a timely basis. I was the Field Director and I remember straining to get questionnaires printed before end of day to go out into the field.
And then FedEx came along…and we were still pushing to meet tighter deadlines. And now we have online research so no materials need to be mailed and we’re still challenged to meet deadlines.
As consumers we’re pushing retailers to meet our deadlines for product access. And here’s Amazon opening up a new perspective on deadlines and gratification. They might be reacting to Google Express options for consumers. Or this may have been in the works before Google Express was introduced.
Yes, I think city dwellers (me included) will make use of this service. And I like the idea of supporting the employment of all those bike riders.
If it remains “free” then a 2 hour delivery window for most products pretty much beats going to a store. How Amazon will ever make money doing this and if it’s sustainable remains to be seen.