The cost for Prime Now is £6.99 per order. Alternatively, shoppers can opt for a two-hour, same-day delivery window for no extra cost.

RETAILERS TRIALING NEAR-IMMEDIATE DELIVERY

Prime Now is a significant ramp-up in terms of Amazon delivery, but the company is not alone in pushing into the ultrafast delivery space. UK general merchandiser Argos has offered 90-minute delivery using the third-party Shutl service for a number of years, after launching a trial back in 2010. Customers placing an online order for goods from one of 312 Argos shops (out of a total of more than 700) can opt to get their purchases couriered to them within a one-hour delivery window, as soon as 90 minutes after purchase. Shutl will also collect and return unwanted purchases as long as it delivered them initially. Shutl was acquired by eBay in late 2013 as part of the latter’s efforts to bolster its delivery options. eBay UK had already announced plans to begin offering one-hour delivery by early 2014 under the eBay Now brand, which had operated in San Francisco since 2012. However, the UK launch of eBay Now never materialized, as the company decided to focus on offering consumers collection options through Argos stores. Reports in late 2014 suggested that eBay was keen to close down its US eBay Now offering, with some media claiming that it was too costly to sustain. eBay’s CEO has indicated that in-store collection is the company’s preferred model and, to that end, eBay recently extended its tie-up with Woolworths in Australia.

BOLSTERING THE AMAZON DELIVERY OFFERING

Ultrafast delivery is the latest extra to be bundled into the Amazon Prime membership scheme, joining services such as online movie streaming and unlimited photo storage. And it’s just the latest initiative from a company that doesn’t stop innovating in fulfillment and delivery. Amazon Dash Wands and Buttons, Amazon Lockers, Subscribe & Save, Amazon Prime Pantry bulk ordering and, famously, drones are among the services launched or trialed to overcome the long-standing hurdle of home delivery. The one element that looks to be missing from this lineup is in-store collection of the type that eBay has launched with retail partners in the UK and Australia. In February this year, Amazon launched its first staffed collection location, at Purdue University in the US, but there has been no sign of the company opening a network of physical stores, a move that has been much speculated in the press. We do not see Amazon pushing into physical stores in any major way. To establish a network of collection stores with any kind of comprehensive coverage would require huge investment, while opening shops stocked with physical product would negate Amazon’s unique selling point of offering near-endless choice. And we think Amazon’s continuous stream of innovations, including Prime Now, makes the appearance of Amazon stores on the high street even less likely. We assume this service will be at least as successful in the UK as it has been in the US.