Last week, Amazon announced plans to upgrade its free-shipping option from two-day to one-day shipping for Prime Members. Over a decade ago, Amazon launched its Prime membership which helped attract millions of loyal customers and help build the brand it is today. Now with Amazons new plan to invest about $800 million in Q2 2019 to speed up the shipping process to one-day what could that mean for current sellers?
Potential Improved Order Trends
With Amazons new one-day shipping program, this may lead to an increase in the number of potential purchases and new Prime customers. This option will attract customers to more likely shop on Amazon than ever before due to convenience the program offers. Amazon’s loyal customer base is attractive to merchants to sell and advertise because customers are willing to buy if their orders ship fast enough. While Amazon’s CFO, Brian Olsavsky, didn’t specify when this option would be the standard for Prime customers, he did state that Amazon is making a steady process. Today, there are more than 100 million prime members worldwide, this would most likely increase that number. According to a study conducted by CIR, Prime members spend an average about $1,400 per year whereas nonmembers typically spend $600. With Amazon’s free shipping upgrade, it will make Prime more appealing to customers who are looking for faster shipping speeds.
Why One Day Shipping is Important?
When Amazon announced its new one-day shipping Walmart and Target shares tumbled more than 3%. Today, Amazon accounts for nearly half of all U.S. eCommerce sales. Since Amazon announced their two-day shipping program back in 2005, the eCommerce race has been more competitive than ever with billions of dollars poured into eCommerce for faster shipping options which have allowed other marketplaces to close the gap on Amazon however with this new one-day shipping announcement Amazon will only continue to widen the gap.
The New Norm?
While Walmart and Target have already rolled out two-day free shipping programs on millions of items, however, it doesn’t compare to Amazon’s enormous selection and variety of items available for free two-day shipping. With Amazon rolling out one-day shipping as it’s standard for Prime Members, same day delivery could be the new norm one day!