- Amazon is turning its Prime two-day shipping guarantee into a one-day shipping offering, Brian Olsavsky, the company’s chief financial officer, announced on the company’s earnings call on Thursday.
- The evolution will happen over the next year, and improvements in its supply chain and logistics will result in an $US800 million investment.
- Two-day shipping has practically become standard for online retailers as they try to catch up to Amazon.
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Amazon’s Prime shipping is becoming even faster.
Brian Olsavsky, the company’s chief financial officer, announced on Amazon’s first-quarter 2019 earnings call that it is working on turning its Prime two-day shipping guarantee into a one-day shipping offering.
Prime two-day shipping is good for the delivery of more than 100 million items sold on Amazon within two days from the day the item is shipped for almost all the continental US. The goal is to eventually offer delivery within one day from the time of shipment for the same number of items to the same locations.
Olsavsky called the move a “significant step” and said that Amazon will make “steady progress throughout the year” in implementing the change.
The move will happen sooner in the US, but it is a global initiative, Olsavsky said.
Amazon will need to beef up its supply chain and fulfillment capabilities to become more efficient and implement the change. The company expects to take on $US800 million in additional expenses tied to the new initiative in the upcoming quarter.
Amazon has been moving in the direction of offering more items with one-day shipping in more areas of the US. Olsavsky said that in April, Amazon added a large number of new items in new zip codes to its one-day shipping program.
He also said Amazon will be “using all the available levers we have right now,” including Amazon Logistics and other package-handling partners such as UPS, to get packages to customers in one day.
Amazon still offers same-day shipping and its two-hour delivery service, Amazon Prime Now, as separate offerings.
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