Amazon has spent about $1.5 billion in the fourth quarter of 2019 alone in an attempt to make its one-day shipping program successful, and one-day shipping is an incentive that many shoppers say will cause them to buy more.
“We’re adding new transportation capacity and putting more selection,” said Maria Renz, Amazon’s vice president of global retail experience.
Both Walmart and Target have been taking advantage of existing infrastructure to also introduce one-day shipping, and to ensure speedy deliveries of items. Both stores also reported more foot traffic in stores and increased online sales due to the changes.
Amazon, for its part, is hoping that the push for faster deliveries is going to increase its Prime membership, which costs $119 a year. Walmart and Target boast about not having a membership fee.
However, those companies don’t offer as wide a range of products for next-day delivery as Amazon does. Walmart’s service covers about 220,000 items, and Target covers around 100,000 to 150,000. Amazon uses a network of warehouses and delivery centers for the fastest delivery. Target uses its more 1,800 stores around the country, and Walmart has fulfillment campuses around the country.
This holiday season will be a test for Amazon, as some experts expect the retailer to be working at full capacity as people rely on the company to deliver goods. Earlier this year, during Amazon’s Prime Day, the company missed the window on some deliveries as the order capacity was unable to keep up with demand.
In September, Amazon said it was going to add a fleet of 100,000 electric vehicles to help with deliveries, and the company recently leased more airplanes as well.
“Prime Day was the first proving ground for one day,” said Youssef Squali, an analyst with SunTrust Banks. “The fourth quarter will be even bigger.”