Competitor Watch
Amazon has announced that it is planning to reduce delivery times for Prime members in the US from two days to one day.
The company said its investment in its fulfilment and logistics network over the past 20 years has been a key enabler. It will ramp up its spending on the initiative by $800m during Q2, thereby expanding both its one-day eligible selection of goods and the number of US postcodes it can reach with one-day delivery.
Next-day delivery is a growing area of the market. More and more people expect to be able to receive their items one day after ordering them. It’s a key part of the growth of e-commerce, which we are well placed to take advantage of.
Amazon said the Prime one-day shipping programme will be global, with the initial expenditure focused on North America. This is intended to be a global improvement in speed tied to Amazon’s Prime membership, so further investment will be required going forward. Amazon did not specify a timeframe for the global roll-out, or how much it intends to spend overall. Prime members in some countries, including the UK, already receive one-day shipping by default.
The news came as Amazon’s overall revenue growth slowed to 17% in the quarter to the end of March 2019, the lowest year-on-year revenue growth in four years. North America sales were up 17%, while international sales recorded more sluggish growth of 9%. Overall operating profits more than doubled to $4.4bn (£3.5bn), up from $1.9bn (£1.5bn) the previous year. Delivery costs were up 21%, lower growth than previous quarters.
