Why does Amazon switch to a priority shipment from one day to the next?

Amazon sets the standard for online shopping – again.

At a call for results, the e-commerce giant announced Thursday that its two-day premium shipping guarantee would become a one-day guarantee.

Over the next year, the goal is to make more packages eligible for the premium shipment in a day than those currently available for two days, which currently exceed 100 million.

This change is significant for all retailers competing with Amazon. It is both ambitious and expensive. Amazon said it has taken additional $ 800 million into its forecast for the next quarter to make it a reality.

Read more: Amazon says that it reduces its delivery guarantee from 2 days to a day

Translation: Amazon is flinging itself, and it's a challenge for all the other retailers with whom it's competing, which at the moment is just about everyone else.

Why do this? Because shipping in two days has essentially become a staple and the offer quickly attracts less than the important premium subscription program from Amazon.

"Amazon's decision to offer Premium members a free shipment in a day is a sign that traditional retailers' investments in improving the customer experience and supply chain for offer a premium-free expedition without fees or membership have an impact on the activities of Amazon ", Frank Poore, CEO and founder of CommerceHub, told Business Insider in an email.

Amazon must keep its customers in the Prime program because it is the fuel of its future success. Major customers spend more and buy more often on the website, and they are more likely to use other Amazon services.

Amazon likely expects this one-day offer to make customers more likely to become Premium members and remain members once they do.

"We believe that this decision is consistent with Amazon's long-standing focus on convenience and selection, but probably also reflects the increasingly competitive retail environment," he said. JP Morgan badysts told investors in a note, reported by CNBC.

Amazon is now investing to prevent this membership base from indulging in Walmart's two-day free shipping offer – available for orders over $ 35 – or a similar Target offer. Some recent data may indicate that Amazon Prime's growth is slowing in the United States.

But reducing shipments by 24 hours is an expensive task. Amazon can probably handle it because Amazon Web Services, its cloud computing platform, still prints money with a margin far superior to that of its retail business.

"The cost difference between daily delivery and daily delivery is huge and should be funded by AWS and the market vendors," said Poore.

Other retailers will find it difficult to deal with a delivery day considering the costs. However, the real battleground may be the same day delivery, but physical stores like Walmart and Target have an advantage over their vast network of stores.