Amazon.com Inc. has launched one-hour and two-hour deliveries of e-commerce orders to consumers in Manhattan, the first phase of a new program called Prime Now.
The newest benefit for members of the $99-per-year Prime two-day free shipping and loyalty program, enables online shoppers to request one-hour delivery of “tens of thousands of daily essentials through a mobile app,” says the e-retailer, No. 1 in the Internet Retailer Top 500 Guide.
Prime Now charges nothing for two-hour delivery and $7.99 for one-hour delivery. Amazon did not stipulate a minimum order value for either delivery window. Amazon did not immediately respond to a request about who would make the deliveries, and in what kinds of vehicles. But the North American e-commerce king says part of the office building it is leasing in Midtown Manhattan will serve as a Prime Now hub.
Amazon says Prime Now will focus on such items as paper towels, shampoo, books, toys and batteries. “There are times when you can’t make it to the store and other times when you simply don’t want to go,” says Dave Clark, Amazon’s senior vice president of worldwide operations. “We’ve long felt that Amazon Prime is the best deal in the history of shopping and now it has gotten even better. Prime members in Manhattan are going to love this service, and we cannot wait to roll out Prime Now to additional cities in 2015.”
Amazon’s same-day delivery service already covers at least 17% of the U.S. population, according to an Internet Retailer estimate.
Matt Nemer, an investment analyst for Wells Fargo Securities who follows Amazon, says he tried the service and found it even faster than advertised. “We tested the service today and were very impressed with the 44-minute delivery time (from when we ordered to our door) and the communication from the service along the way (we received two text messages: when the delivery was on its way and when the items were delivered),” Nemer wrote in a note to clients. “Currently, a portion of Amazon’s facility on West 34th Street in Manhattan is servicing all Prime Now orders and delivery is limited to just a few neighborhoods for now.
“Our overall take is that this service will further strengthen the bond with Prime members in urban markets (we have already noticed posts on Facebook promoting the service), and could be disruptive to local retailers and chains with urban stores. Relative to competition we think the Prime Now offer is very compelling (two-hour delivery is free) given Uber Rush is approximately $16 in Manhattan and other same day delivery services (Fresh Direct or Google Shopping Express) either aren’t as fast, don’t have the same breadth of selection, and/or charge more for delivery.”
Amazon is not the only company offering one-hour delivery of online orders. Instacart, a start-up delivery service, offers delivery of grocery orders from nearby supermarkets in as little as one hour in 15 markets. One-hour delivery costs $5.99 for a minimum order of $35.
Prime Now represents the latest in a long list of recent additions to the shipping and loyalty program. Earlier this month, the e-retailer launched Amazon Elements exclusively for Prime members. Elements for now offer Amazon-branded diapers and baby wipes, along with nearly a novella’s worth of information about those products, including descriptions of sourcing and ingredients along with customer reviews. (For much, much more about Amazon, Prime, Elements and what the retailer might do in 2015, check out the upcoming January issue of Internet Retailer magazine. You can subscribe for free here or check out previous free content here.)
Amazon does not disclose how many Prime members there, except to say the number exceeds 20 million. As a Prime membership covers an entire household, analysts estimate anywhere from 25-50 million consumers can take advantage of the two-day shipping program.
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