Amazon.com launched a new offering on Thursday that is aimed squarely at fulfilling its mission of delivering goods to its shoppers faster than any of its rivals.
Members of its Amazon Prime program in Manhattan now have access to Prime Now, a benefit in which shoppers can get two-hour delivery of an order of "daily essentials" for free or pay $7.
99 for one-hour delivery. Prime Now is currently available in selected areas of the borough and the tech giant plans to bring it to other cities in 2015. Customers can use this option on orders placed between 6 a.m. and midnight.Amazon has been experimenting with same-day delivery in major urban areas for a while now, in most cases requiring that orders be placed by noon to ultimately be delivered sometime before 9 p.m. This fresh variation allows for more flexibility on delivery time and turbo-charges the speed at which they are promising the bring orders to customers.
The announcement also makes clear what Amazon is doing with its space on 34th Street Manhattan, which some had speculated was to be its first brick-and-mortar store. The company says a portion of that building will be the hub for delivery of Prime Now orders.
There is no shortage of companies jockeying with Amazon for same-day delivery supremacy: Google is reportedly prepared to plow $500 million into its Google Express offering. Start-ups such as Postmates, Instacart and Deliv are also gaining traction.
All of these business are fighting hard to be the dominant player on a service that is extraordinarily hard to do profitably. This, in part, is why dot-com era efforts such as Webvan and Kozmo collapsed. It may also explain why eBay appears to have scaled back its ambitions for its same-day effort, eBay Now. EBay once promised to add its same-day delivery option from five to 25 cities by the end of the year, but that expansion never happened. Instead, the company is now focused on building its eBay Local offering, which is a delivery and in-store pickup program for small businesses.
However, profitability may not be a top concern for Amazon, a company that has proven again and again that it’s willing to take a loss on something that it believes will enrich its overall shopping experience and cultivate customer loyalty.
(Jeffrey P. Bezos, the chief executive of Amazon, owns The Washington Post.)
Prime Now seems to bank on the notion that there's consumer appetite for near-instant gratification on certain kinds of online purchases. But all of these same-day delivery rivals are in the early innings of a long ballgame, and so it remains to be seen whether what customers are really after with same-day delivery is raw speed or the convenience and flexibility.
For example, when Deliv chief executive Daphne Carmeli founded her same-day business, she says she bought up a trove of URLs with the words "1-hour" or "60-minute" in them, thinking that speed was going to be critical. But as the service grew, she found most shoppers weren't using it that way: They were scheduling deliveries for later in the evening when they'd be home from work, or for the free hour they had between yoga class and a dinner date.
To be sure, Amazon and Deliv are focused on delivering different kinds of goods. Deliv partners with malls, so many of its packages contain apparel, small electronics and home goods. Amazon, meanwhile, is aiming to bring you "daily essentials" such as paper towels, batteries or diapers. Maybe speed is more important for a shopper who has just run out of shampoo than a shopper who just snapped up a cashmere sweater.
As these same-day delivery offerings expand to more markets, it's likely we'll get more clarity on exactly what their value is to consumers.
