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Amazon Prime moves to a day's freight is "money spent," analysts say




Amazon Prime has moved from two-day to one-day shipping this year, being a cautious one, even though it comes at a significant price for the Seattle tech giant, analysts say.

<p class = "canvas-atomic text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Amazon ( AMZN ) surprised Wall Street analysts during their fiscal first quarter of 201[ads1]9 by announcing that it would invest at least $ 800 million during its second quarter to make a one-day delivery standard for Amazon Prime customers. Finance that Amazon's huge investment in faster shipping is money spent, and the opposite move will help attract and retain customers, although it's not clear how much Amazon will eventually spend. "Amazon (AMZN) surprised Wall Street analysts in During the quarter of 2019 earnings calls by announcing that it would invest at least $ 800 million in the company's second quarter to make a day's shipping standard for Amazon Prime customers. Two analysts tell Yahoo Finance that Amazon's huge investment in faster shipping is money spent, and the opposite move will help attract and retain customers, although it's not so clear how much Amazon will eventually spend.

"It's a bit jaw to even think about the prospect of taking something that was already remarkable [Amazon Prime] and making it even more remarkable," acclaimed Piper Jaffray analyst Michael J. Olson, who refused to estimate how much one-off shipping could eventually cost Amazon or how much incremental revenue it could possibly bring to the company. "While spending $ 800 million on building it out in the June quarter, with additional spending coming later this year, we don't have a good sense of what that extra expense looks like. But I believe that Amazon's one-time delivery initiative only increases the company's flight speed to other competitors in the room. "

Since Amazon launched it in 2005, Amazon Prime has changed the way customers experience online stores by standardizing two-day fast shipping. And as customers' expectations of fast delivery have evolved, Prime has itself. Over the years, Amazon has added a number of media services to Prime users to consume, including video and music streaming. In fact, Prime has become so successful, it now has over 100 million US subscribers, according to a report published by Consumer Intelligence Research Partners in January. It comes from about 91 million Amazon Prime subscribers in the US at the end of December 2017, according to the same report.

Don't Underestimate Fast Shipping

"It can't be underestimated how much speed is a driver in e-commerce, and of course there has always been Amazon's advantage with free two-day shipping," explains eMarketer analyst Andrew Lipsman. "What's interesting is that in the last couple of years, other big dealers have begun to narrow the gap."

<p class = "canvas fabric canvas text Mb (1.0em) Mb (0) – sm Walmart ( WMT ) and Target ( TGT ) have significantly affected Over the past five years, Walmart, which experienced e-commerce sales up 43% over the last quarter, now offers in-store online orders of over 2,100 of its 4,300 locations, as well as online grocery stores from more than 800 stores. " data-response time = "28"> In the past five years, Walmart (WMT) and Target (TGT) have significantly hit the way customers receive their orders. Walmart, which saw e-commerce sales, grew 43% compared to the second quarter last year, now offering in-store online orders of more than 2,100 of its 4,300 locations, as well as online grocery stores from more than 800 stores.

<p class = "canvas-atom canvas text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "Target, which then increased its own e-commerce sales with 28% in the fourth quarter, and processed 60% more items & nbsp; during November and December last year compared to the previous year, through options such as the ability to send from the store, online ordering and " Run up ", allowing customers to drive to designated delivery pickups on a physical destination to get their orders." Data-response time = "29"> Target, which saw its own e-commerce sales, increased by 28% during the fourth quarter, processed 60% more records during November and December last year compared to the previous year, through options such as the ability to send from store, online ordering and "run up", allowing customers to drive to designated delivery pickups on a physical destination to get their orders.

While the Amazon shares rose above 2% after the company's news, the Walmart share died 2% and the Target share was down 5.6% from Friday when the markets closed.

Not all analysts are off with Amazon's standard one-day shipping. Forester Analyst Sucharita Mulpuru called Amazon's announcement a veritable "marketplace", given that the company is already supplying one day for selected items.

"Just because they say one day, the new standard does not mean that everything is a day [shipping]" explained Mulpuru. "Even with two days [shipping] now, you'll often get things coming later – either because Amazon explicitly told you in advance that it should come later or that it just wasn't on time because the carrier was delayed." [19659009] Still, the Amazon's pressure to speed up the shipping standard again is likely to pace the rest of the e-commerce, which is still trying to keep up with the competing Seattle tech giant.

<p class = "canvas-atom canvas text Mb (1.0 em) Mb (0) – sm Mt (0.8em) – sm "type =" text "content =" More from JP: "data-reactid =" 34 "> ] More from JP :



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