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With Scheduled Delivery, Amazon Moves Beyond Just Speed

By Jeremy Bowman - Updated Apr 9, 2019 at 4:36PM

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The e-commerce giant rolled out an option for Prime members to choose what day of the week their deliveries will arrive.

Amazon ( AMZN -0.18% ) has set the standard for e-commerce delivery as the industry came of age alongside the internet. With its Prime membership program, the company made free two-day delivery the minimum to compete, forcing brick-and-mortar rivals such as WalmartTarget, and even Costco to follow suit.

Now, Amazon is taking its delivery leadership one step further, offering customers not just fast delivery but the option to schedule a delivery day of their choosing, which it's calling Amazon Day.

The service -- in limited use since November and launched across the United States Thursday -- is as simple as it sounds. Prime members choose the day of the week that works best for them to receive packages and Amazon will deliver all of their orders that week, including ones made at separate times, on that day. Customers still have the option to receive orders on other days if, for instance, an item is needed sooner. 

Click here for the latest earnings call transcript for Amazon.

A cardboard box with the Amazon logo on it

Image source: Amazon.

Emphasizing convenience

Amazon has long been aware that the challenges in e-commerce delivery go beyond just speed. Fast delivery is often at the top of consumers' wishlists for online shopping. But they also want other convenient features like free return shipping and the ability to schedule a customized delivery time. That last feature can go a long way to reducing the risk of "porch pirates" or the dreaded pick-up slip from the various delivery services Amazon uses, informing a customer that they must go somewhere to fetch their order. Not every customer has an easy way to receive packages at home, and the Amazon Day scheduling option can greatly reduce the hassle involved in tracking packages.

Amazon's aim to be a customer's most convenient delivery option explains why it has invested in things like Amazon Lockers and why it acquired Ring, a maker of video-enabled doorbells, for $1 billion last year. Ring won't help customers get their packages any faster, but it does provide video evidence that a package was, in fact, delivered. It can also help deter thieves who steal packages from porches and doorsteps.

A win-win

Beyond the potential customer benefits in the new Amazon Day program, the e-commerce giant has self-interested reasons for offering a scheduled service. Slower deliveries are cheaper to process. Weekly scheduling can help the company save money and reduce the volume of environmentally unfriendly packaging it requires by grouping multiple orders together, at least when it's able to do so from the same distribution center. Amazon's use of excessive packaging is a regular subject of criticism from environmental groups and concerned customers.

In addition to cutting down on extra packaging, the Amazon Day program will reduce fossil fuel consumption inherent in last-mile delivery. Such efforts should help Amazon fulfill initiatives like "Shipment Zero," which was announced last week and outlines plans to eventually make all Amazon shipments net carbon neutral with a specific goal of making 50% of shipments net zero carbon by 2030. 

While it remains to be seen if the new Amazon Day program finds an audience with Prime members, it's likely to find favor with the site's most frequent shoppers and those who purchase items multiple times a week. The service would also make sense for those who travel frequently or are away from home on certain days.

It seems unlikely that Amazon competitors will follow suit with their own version of this service any time soon. Most are still focused on fast, free shipping and don't yet have the volume of ordering from individual customers to justify offering a regularly scheduled delivery day.

But Amazon customers and investors can expect the e-commerce giant will continue introducing more options that make the delivery and shopping experience even more customizable and convenient.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis – even one of our own – helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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