Data, Customer Love Drive Amazon Prime Now's Growth
In an interview yesterday afternoon during the opening day of Shoptalk in Las Vegas, Stephenie Landry, vice president of Amazon Prime Now, the online retailer’s service that offers household items and essentials consumers need with free two-hour delivery, discussed the growth of the business and what her focus will be to continue that upward trajectory. Landry was interviewed by Laura Stevens, a staff reporter with The Wall Street Journal.
Prime Now, which launched on Dec. 18, 2014 in one ZIP code in Manhattan, has expanded to more than 45 cities in seven countries. In addition to free two-hour shipping (for Amazon Prime members), Prime Now offers one-hour shipping for $7.99 per delivery.
“People prefer to get free shipping, but there’s a need sometimes for one-hour-or-less goods,” said Landry, citing grocery, pharmacy, beauty and alcohol as the top items customers are paying for to receive one-hour delivery.
While Amazon Prime Now does facilitate in-the-moment purchases, the business unit’s priority is to give people their time back, said Landry. The service enables consumers to skip a trip to the store for those items where shopping may not be as fun, but they need the item(s) right away.
Learning From the Data
Landry recounted the launch of Amazon Prime Now in Manhattan just before Christmas in 2014. Her and her team had set up what amounted to a mission control center in Brooklyn, eagerly awaiting the surge of orders to come. And when they did, Amazon did what it does best: used that customer data to inform business decisions. That launch of Amazon Prime Now in Manhattan has been the foundation for the service’s expansion into other markets.
“We learned from the customer data in that first city,” noted Landry. “We’re very process oriented in everything we do at Amazon. The task of launching in a new city hasn’t gotten easier; our process has gotten to a science, which makes it easier.”
Integral to the Amazon Prime Now process is fulfillment accuracy, quality and speed. These attributes are inherent in Amazon’s DNA, said Landry, giving her business unit a built-in advantage. Another factor that has contributed to the success of Prime Now is that it was able to tap into Amazon’s massive customer base that already existed. Prime Now just offers those existing customers a service — speedy delivery — that’s been a growing consumer demand in recent years.
In Search of Customer Love
Fast shipping — and particularly ultra-fast shipping — isn’t easy or cheap to do. While concerns over cost and process do weigh on Landry’s mind, they’re not what motivate her.
“Customer expectations around speed is driving this,” Landry said. “We launched the service and saw the demand, which made it more worthwhile. Cost is one thing I think about, but customer love is what I really spend the most time on.”
“I would love to serve every corner of the earth with Prime Now,” added Landry. “Expand product offerings, more markets. How are we going to make our customers’ lives easier, and what will make them come back again? The answer to that question is what we’re going to focus on. History has shown that customers are going to demand disruption, and fast shipping is going to be part of that.”
Related story: Why So Many Stores Are Closing: The Changing Face of Loyalty