Amazon (AMZN - Free Report) is firing on all cylinders to expand presence in the e-commerce space on the back of its strengthening delivery system.
This is evident from the company’s latest expansion of its free one-day shipping service. The company’s Prime Free One Day service now covers over 10 million products under the categories such as beauty products, baby products, books, daily necessities and devices across the United States.
Consequently, Prime members will now be able to avail one-day delivery of items like cosmetics, birthday presents, towels, cleaning products and closet organizers, to name a few, at their doorsteps, garage or even in cars.
We believe the latest expansion of one-day delivery service is likely to bolster Amazon’s e-commerce capabilities further. Additionally, it will be able to deliver better shopping experience to Prime shoppers which in turn is likely to aid the adoption rate of Prime.
Consequently, this will drive the top line in the near term.
Strengthening Delivery Services
Amazon’s recent move is in sync with its continued focus toward strengthening delivery capabilities.
In the last reported quarter, the e-commerce giant revealed its plans to gradually substitute two-day delivery with one-day delivery service. Further, it rolled out one-day shipping service in 10,000 cities and towns in the United States for Prime members during 2018 holiday season.
In addition to this, Amazon’s two-hour delivery service for natural and organic products such as meat and seafood, fresh produce and staples from Whole Foods Market has expanded to almost 90 U.S. metros.
All these strong endeavors along with latest initiative are expected to continue aiding the company’s footprint in the U.S. e-commerce and grocery retail space.
Gaining Competitive Edge
Amazon with its latest move ups the ante against Walmart (WMT - Free Report) .
Walmart recently unveiled free NextDay delivery service for a wide range of general merchandise and will be initially available in Phoenix and Las Vegas. It will be gradually rolled out in Southern California.
Notably, the service covers 220,000 items available on Walmart.com. We believe Amazon is likely to gain a competitive edge against Walmart owing to its coverage of 10 million products by Prime Free One Day service.
Nevertheless, Walmart and other retailers like Target (TGT - Free Report) and Kroger (KR - Free Report) are leaving no stone unturned to expand their delivery strength in order to combat competitive threat from Amazon.
Further, Walmart acquired Parcel and extended partnership with Deliv to support its same-day delivery initiative.
Target acquired Shipt to expand same-day delivery services. Moreover, its buyout of Grand Junction has improved its delivery capabilities.
Further, Kroger’s recently acquired Ocado, which is likely to intensify the war in the U.S. grocery market.
Meanwhile, Amazon quadrupled its order for Mercedes-Benz vans to support its delivery service program “last-mile”, which is set to pick up deliveries from 75 supplier centers in the United States.
Further, it joined forces with Woolpert, a Beavercreek-based engineering, geospatial and architecture firm for the development of its airport project, Amazon CVG Air Cargo Hub, at Cincinnati/Northern Kentucky International Airport.
Additionally, it has expanded partnership with aircraft leasing company Air Transport Services Group in a bid to ramp up its delivery efforts. Per the deal, ATSG will lease an additional 10 aircraft to support Amazon’s delivery services. These new cargo planes from ATSG will join Amazon’s fleet over the course of next two years.
All these strong efforts are expected to aid the dominant position of Amazon in e-commerce market.
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