Amazon says more packages are arriving in a day or less after hefty investment in speedy fulfillment

Amazon
says
it
is
getting
even
more
packages
to
customers
in
one
day
or
sooner,
a
metric
the
e-retailer
is
promoting
to
customers
as
it
faces
heightened
competition
in
online
shopping.

The
company
said
on
Monday
that
nearly
60%
of
orders
placed
through
Prime
in
the
top
60
U.S.
metro
areas
in
the
first
quarter
arrived
the
same
or
next
day.
That
is
up
from
roughly
50%
in
the
second
quarter
of
2023.

It
is
a
topic
that
will
be
of
notable
interest
to
investors
when
Amazon
reports
first-quarter
earnings
after
the
close
of
trading
on
Tuesday.
Wall
Street
expects
the
company
to
post
another
quarter
of
double-digit
revenue
expansion
and
for
profits
to
more
than
double
from
a
year
earlier.

Cost-cutting
efforts,
cloud-computing
demand
and
faster
fulfillment
have
driven
higher
profits
in
recent
quarters.

Speedy
delivery
is
a
hallmark
of
Amazon’s
Prime
subscription
offering,
which
charges
members
$139
a
year
for
benefits
such
as
two-day
shipping
and
video
streaming.
The
company
has
said
it
wants
to
make
same-
and
next-day
delivery
the
standard,
and
it
plans
to
double
the
number
of
same-day
delivery
facilities
in
the
U.S.
within
the
next
few
years.

“As
we
get
items
to
customers
this
fast,
customers
choose
Amazon
to
fulfill
their
shopping
needs
more
frequently,”
CEO
Andy
Jassy

wrote
in
his
letter
to
shareholders
earlier
this
month. “And
we
can
see
the
results
in
various
areas
including
how
fast
our
everyday
essentials
business
is
growing
(over
20%
y/y
in
Q4
2023).”

According
to
RBC
Capital
Markets
data,
consumers
have
been
shown
to
spend
and
shop
more
often
if
they
have
one-day
shipping.

Amazon’s
physical
footprint
swelled
between
2020
and
2022
as
the
pandemic-driven
e-commerce
boom
pushed
the
company
to
rapidly
add
new
warehouse
and
delivery
centers
to
its
logistics
network.
Amazon
last
year
retooled
that
network
into
eight
regions
instead
of
a
national
model,
which
the
company
says
has
resulted
in
faster
yet
cheaper
deliveries.
Jassy
in
his
shareholder
letter
noted
that
cost
to
serve,
or
the
cost
to
get
a
product
to
a
shopper,
was
down
in
2023
by
more
than
45
cents
per
unit
year
over
year.

Amazon
has
already
stood
up
more
than
55
same-day
delivery
sites
in
the
U.S.,
primarily
clustered
around
major
metro
areas.
The
facilities
are
roughly
100,000
square
feet,
compared
to
a
typical
Amazon
warehouse,
which
can
be
the
size
of
26
football
fields,
and
they
store
a
smaller
selection
of
goods
that
are
the
top-selling
items
in
each
city.

Same-day
sites
also
condense
the
fulfillment
process,
typically
spread
across
multiple
Amazon
facilities
under
one
roof.
A
package
makes
fewer
stops
on
its
route
to
a
shopper’s
doorstep,
which
cuts
down
on
costs
per
shipment.

Amazon
has
bolstered
investment
in
fast
shipping
as
traditional
retail
rivals


Walmart
and


Target
have
stepped
up
their
delivery
game.
Walmart
says
it
can
deliver
items
to
shoppers
in
as
little
as
30
minutes,
while
Target

in
March
launched
a
new
loyalty
program
that
offers
same-day
delivery
on
orders
more
than
$35
in
as
little
as
an
hour.