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According to analysts, the passage of Amazon Prime from two days to one day this year is cautious, even if it has a considerable cost for the technology giant Seattle.
<p class = "canvas-atom text-canvas Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Amazon (AMZN) surprised Wall Street analysts at the call of its first quarter results of fiscal year 2019 by announcing that it would invest & nbsp;at least $ 800 million& nbsp; in the second quarter, the company set a one-day shipping standard for Amazon Prime customers. Two analysts explain to Yahoo Finance that Amazon's huge investment in faster shipping represents money well spent, believing that this transfer would help attract and retain buyers, although it's hard to know how much Amazon will ultimately spend. "Data-reactid =" 23 "> Amazon (AMZN) surprised Wall Street analysts at the call of its first quarter 2019 results by announcing that it would invest at least $ 800 million during the company 's second quarter to create a daily shipping standard for Amazon Prime customers.One analysts explain to Yahoo Finance that Amazon' s huge investment in a faster shipment, the company 's. Money is well spent, arguing that the move will help attract and retain buyers, even though it's hard to know how much Amazon will ultimately spend.
"It's a bit staggering to even think of the prospect of taking something that was already remarkable [Amazon Prime] and turn it into something even more remarkable, "acknowledged Michael J. Olson, an analyst at Piper Jaffray, who declined to estimate the cost of a daily expedition that may cost Amazon or other additional revenues that may eventually accrue to the company. "Although they are spending $ 800 million on construction in the June quarter, with additional spending coming later in the year, we have no clear idea of how to allocate these extra expenses. But I think Amazon's one-day shipping initiative only increases the company's exit speed compared to other competitors in the industry. "
Since Amazon launched it in 2005, Amazon Prime has changed the way buyers perceive online retail by standardizing fast shipping in two days. And as buyers' expectations for fast delivery have changed, Prime itself has evolved. Over the years, Amazon has added a number of multimedia services to be consumed by primary users, including streaming videos and music. Indeed, the success of Prime is such that it now has more than 100 million subscribers in the United States, according to a report released by Consumer Intelligence Research Partners in January. That's about 91 million Amazon Prime subscribers in the United States by the end of December 2017, according to the same report.
Do not underestimate the fast shipping
"We can not underestimate the speed with which e-commerce is driving. Clearly, this advantage has always been Amazon's advantage with free shipping in two days, "says Andrew Lipsman, an analyst at eMarketer. "What is interesting, is that in the past two years, other major retailers have begun to narrow the gap."
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Indeed, in the last five years alone, Walmart (WMT) and target (TGT) have significantly improved the way customers receive their orders. Walmart, which saw its online sales grow 43% over its most recent quarter, now offers in-store order picking of more than 2,100 online orders across 4,300 locations, as well as delivery Online grocery shopping from More than 800 stores. Indeed, in the last five years alone, Walmart (WMT) and Target (TGT) have dramatically improved the way customers receive their orders – Walmart, which saw e-commerce as sales increased 43% year-over-year in the most recent quarter and now offers in-store order fulfillment in over 2,100 of the 4,300 stores on offer, as well as an online grocery delivery in over 800 stores.
<p class = "canvas-atom web-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Target, which saw its own online sales increase of 28% year-over-year during the fourth quarter, & nbsp;processed 60% more items& nbsp; during the November and December vacation months compared to the previous year, thanks to options such as the ability to ship from the store, the withdrawal of the online order and "Drive Up", which allow customers to get to designated delivery points physical target location to get their orders. "Data-reactid =" 29 "> Target, which saw its own online sales increase 28% year-over-year during its fourth quarter, processed 60% more items during the November and December holiday months last compared to the previous year, thanks to options such as the ability to ship from the store, the collection of online orders and "Drive Up", which allow buyers to get to points designated delivery points to a target physical location for their orders.
Although Amazon's shares rose more than 2% as a result of the company's information, Walmart shares plummeted by 2% and Target's shares by 5.6% on Friday as markets close.
Not all analysts were seduced by the standardization of Amazon's one-day expeditions. Forrester analyst Sucharita Mulpuru called Amazon's announcement "a real marketing argument" as the company is already offering a one-day delivery for certain items.
"It's not because we say that a day is the new norm, everything is a day [shipping]Mulpuru explained. "Even with two days [shipping] now, you will often have things that happen later – either because Amazon has explicitly told you in advance that it would happen later, or that it was just not at the same time. hour because the carrier had been delayed. "
Nevertheless, Amazon's efforts to make shipping standards faster again are likely to set the tone for the rest of e-commerce, which is still trying to keep up with Seattle's competitive technology giant.
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