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Amazon Increases Delivery Competition

Amazon.com recently expanded its Sunday delivery service to 15 cities, including New Orleans. The original Sunday delivery service, which began last November, only included New York and Los Angeles.

“We’re pleased to be delivering more packages on Sunday and just allowing the shippers and customers to appreciate the benefits of U.S. Mail,” says U.S. Postal Service spokeswoman Sue Brennan. “This is a win-win for both organizations, and we do hope it expands.”

The spread of Amazon’s Sunday delivery service presents a business boost to the struggling U.S. Postal Service, which has been seeking ways to tap into the growth of online shopping. Currently, the U.S. Postal Service is Amazon’s exclusive Sunday distribution partner.

Amazon Prime members who order an eligible item as late as Friday can receive the package as soon as Sunday. This two-day shipping, however, is only available for customers who are a pay the $99 annual Prime membership.

Amazon Prime customers don’t have to do anything special to take advantage of Sunday shipping. If a purchased item is available for Sunday delivery in a particular city, Amazon customers will see that option when they add the item to their shopping carts during checkout.

Customers who don’t pay the annual Amazon Prime fee can also get Sunday delivery, but they must pay standard shipping rates.

Amazon says that “millions” of products qualify for Sunday delivery. Mike Roth, Amazon’s vice president of North America operations, says that so far the most common items delivered on Sunday include baby supplies, such as newborn apparel, books and toys. “Sunday delivery is clearly crossing errands off the weekend to-do list,” he says.

According to an article in USA Today, chief investment officer at ClearPath Capital Partners in San Francisco Brendan Connaughtan believes Amazon’s Sunday push puts added pressure on rival retailers. “I think it’s going to just make it tougher for their competitors to compete against them. The thing about Amazon is it’s a category killer and an industry killer.”

“In terms of who’s likely to be next, I’d be looking to some extent at the other largest online retailers, and that includes Staples, Wal-Mart, Office Depot, OfficeMax, Sears, QVC, Best Buy and Macy’s,” says Jan Dawson, chief analyst at Jackdaw Research. “But it’s probably best positioned by most of those retailers as a premium service for people who need certain items urgently, and they’d pay accordingly.”
 

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