Amazon’s reach has grown so fast in the US that American consumers could soon find it pointless to take the trip to physical stores.
According to a note published on Thursday by financial firm PiperJaffray, Amazon now has a warehouse or delivery station within 20 miles of 44% of the US population. That’s up from 38% in 2015 and 26% in 2014.
Having closer proximity to US consumers means it costs Amazon less to deliver products. It also makes it easier to run Amazon’s growing same-day and same-hour deliver
y services. And combine that with Amazon’s massively loyal Prime userbase, which is estimated to be 69 million, going to the store to buy stuff could soon become a relic of the past.
“We believe this gives Amazon a critical competitive advantage now that it has acquired so many Prime users in the United State: same-hour and same-day delivery can structurally replace trips to the store,” PiperJaffray’s analyst Gene Munster wrote in the note.
This chart should give a clue to how fast Amazon’s been growing its fulfillment network node, which includes fulfillment centres, product sorting centres, delivery stations, and Prime Now Hubs:
Munster notes that Amazon’s proximity to consumers is still lower than traditional big box retailers like Walmart or Target. But given Amazon’s heavy engagement with its Prime users, wider product selection, and quick delivery network, it wouldn’t be a huge risk to overcome, the note said.
Munster also writes Amazon will continue to expand its reach, although it won’t get to the final 20% to 30% of the population, likely because there are parts of the country that simply don’t have high demand for online deliveries. Still, that means roughly 80% of the US population could be within 20 miles of Amazon’s reach eventually.
Here’s a snapshot of where Amazon’s fulfillment nodes are located now:
Disclosure: Jeff Bezos is an investor in Business Insider through hispersonal investment company Bezos Expeditions.
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