AP/Patrick Semansky
- Amazon is turning its Prime two-day shipping guarantee into a one-day shipping offering, CFO Brian Olsavsky announced on an earnings call Thursday.
- The evolution will happen over the next year, and improvements in supply chain and logistics will result in $800 million in 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.
CFO Brian Olsavsky 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.
Currently, Prime two-day shipping is good for delivery of over 100 million items sold on Amazon.com in two days from the day the item is shipped, for almost all of the continental US. The goal is to eventually offer the same number of items to the same locations, in one day from the time of shipment.
Olsavsky called the move a "significant step" on the call 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 $800 million in additional expenses in the upcoming quarter tied to the new initiative.
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 packaging handling partners like 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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Source: Business Insider – dgreen@businessinsider.com (Dennis Green)