Report: Amazon Opening More Ultrafast Delivery Sites
Amazon.com is reportedly expanding ultrafast delivery options and devoting more resources to facilities and services structured to deliver packages to customers in less than a day, according to a Feb. 26 report in The Wall Street Journal. The expansions are happening at a crucial point for Amazon, which faces competition for fast delivery options while CEO Andy Jassy puts a renewed focus on profits, the report said.
A key part of Amazon's new ultrafast delivery strategy is putting an increased focus on its network of “same-day site” warehouses that are a combination mini-fulfillment centers and delivery station under one roof and promise a five-hour service level. Citing statistics from MWPVL International Inc., which monitors Amazon warehouse operations, WSJ said Amazon opened 45 of theses sites in the last four years and could expand to at least 150 in the next several years. MWPVL said these sites are primarily based near larger cities and deliver Amazon’s most popular items. Amazon told the WSJ the new locations include Los Angeles, San Francisco and Phoenix, though the company declined to say how many same-day sites it has.
The sped-up option could come with added fees, according to the WSJ report.
Total Retail's Take: The news about Amazon upping its investment in its supply chain is a sign that it remains committed to pushing its logistics system for speed to keep up with increased competition from rivals. The news, after all, comes days after Target announced it was investing $100 million to expand its delivery operations. Target announced last week that it aimed to increase its number of sortation facilities from nine to more than 15 by the end of 2026. In addition, Walmart last month announced plans to expand its Private Fleet Development Program, which it launched last year to improve deliveries for its growing e-commerce business.
It's also interesting to note that Amazon's decision to focus on ultrafast delivery comes as the online behemoth comes off a year in which high spending and a drop in demand led it to report a $2.7 billion loss, its first reported loss since 2014.
Melissa Campanelli is Editor-in-Chief of Total Retail. She is an industry veteran, having covered all aspects of retail, tech, digital, e-commerce, and marketing over the past 20 years. Melissa is also the co-founder of the Women in Retail Leadership Circle.