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Amazon.com's Catalyst for a Massive Holiday Quarter

By Daniel Sparks - Dec 13, 2017 at 5:33PM

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The e-commerce giant may have just revealed one of its secret weapons for huge sales growth this holiday season.

In a timely move to capture more Christmas orders from customers, Amazon.com, Inc. (AMZN -2.49%) announced a major expansion of its free same-day and one-day shipping for Prime members. In addition, Amazon said customers who aren't Prime members would be eligible to try Prime for free for 30 days, getting access to one- and same-day shipping, where available.

The expansion of its popular Prime delivery options will undoubtedly have a meaningful impact on the e-commerce giant's ability to capture incremental orders this holiday season. It's one way the company will attempt to deliver the startling revenue growth management predicted it would be able to log during the holiday period.

Boxes in an Amazon fulfillment center.

Image source: Amazon.com

Coming to 3,000 new cities and towns

"Today, Amazon announced it expanded Prime Free Same-Day Delivery and Prime Free One-Day Shipping -- now available to members in more than 8,000 cities and towns," Amazon said on Wednesday. That's a 60% increase from the 5,000 cities and towns these shipping services were available in before Wednesday's expansion, according to TechCrunch.

Amazon's 30-day free trial for Prime, the company noted, will include the same expanded shipping services that paying subscribers have access to -- a compelling offering that could open up a major funnel of potential new customers.

In its press release, Amazon detailed the convenient last-minute shipping days it now boasts for customers who are buying products that need to be delivered on time for Christmas:

  • Dec. 15: Last day of free shipping of items fulfilled and shipped by Amazon for customers who aren't Prime members.
  • Dec. 18: Last day for standard shipping (free for Prime members)
  • Dec. 22: Last day for two-day shipping (free for Prime members)
  • Dec. 23: Last day for one-day shipping (free for Prime members)
  • Dec. 24: Last day for same-day delivery (free for Prime members)
  • Dec. 24 by 9 p.m. local time: Last time for two-hour delivery (free for Prime members)
  • Dec. 24 by 11:59 p.m. local time: Last time for Prime Now deliveries in 30 select cities in the U.S.

Of course, not all products are eligible for all of these shipping services. And not all markets support one-day, same-day, or Prime Now shipping. But it's fair to say that, if you're a last-minute shopper, Amazon probably has you covered. Better yet, customers will also be able to find free shipping for many of the items on Amazon. The company says it now offers free shipping on over 100 million products.

"We are continually investing in Prime, adding more selection and making delivery faster and more convenient," Amazon said on Wednesday.

Catering to last-minute shoppers

Investors shouldn't underestimate the impact that an expansion like this could have on Amazon's sales during its fourth quarter. To get an idea of how important staying relevant for last-minute holiday shoppers is, investors can look to Etsy (ETSY -2.13%).

Etsy management recently admitted that during previous holiday seasons, shopping for Christmas fell off a cliff after mid-December since the company didn't offer convenient, sitewide free shipping options. To address this issue, the company went all out on helping its sellers offer coordinated holiday sales and free shipping to cater to more last-minute shoppers.

Unsurprisingly, Amazon has similarly launched aggressive free shipping options in the holiday season for its Amazon Handmade service -- an Etsy-like online destination for buying and selling handcrafted items -- upping the ante this year for buyers looking for personalized or handmade gifts.

Amazon's ambitious rollout of one- and same-day shipping ahead of Christmas will help it deliver on its enormous guidance for its fourth quarter. Management said it expects fourth-quarter revenue to jump 28% to 38% year over year.

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