Why Amazon Is Gambling Big On Prime Now

Amazon’s immediate area of interest deals with, as it happens, immediacy.

According to Re/code, the eCommerce giant is putting a significant amount of focus on its one- (or two-) hour delivery service, Prime Now, which launched in Manhattan last year and has been expanding ever since.

To support its position, the outlet quotes Prime Now General Manager Stephenie Landry, who remarked in a recent interview: “When we see something” that customers love, “we definitely want to expand it as fast as possible.”

Landry acknowledged that the infrastructure of the Prime Now service (which is free to Amazon Prime members for two-hour deliveries, while one-hour deliveries carry a $7.99 fee) — in particular the amount of warehouse space that can be dedicated to it — currently keeps its catalog limited to between 15,000 and 40,000 items (depending on the city), while the standard Amazon Prime service, by contrast, offers free two-day shipping on millions of products. Nevertheless, the GM alluded to the possibility of increasing the reach of Prime Now.

“There is some functional limit if we continue to do things the way we do them right now,” Re/code quotes Landry as saying. “But the company is really inventive.”

If there’s a chance for Prime Now to show off its potential, attests the outlet, it’s during the in-progress holiday season. Re/code shares that Amazon recently added 4,000 gift-related items to the Prime Now selection and will be offering Prime Now deliveries through Christmas Eve — certainly an appealing aspect for the last-minute holiday shopper.

Landry’s confidence aside, Re/code points out that there are obstacles that Prime Now still needs to overcome in order to go mainstream, including the mandatory $99 annual fee for Prime membership, competition from services such as Postmates, Deliv, Google and Uber and the economic necessity to maintain a certain volume of deliveries. Prime Now, adds the outlet, has also gotten Amazon in some legal trouble, with four former couriers for the service suing the company on the grounds that they were incorrectly classified as contractors instead of employees.

In spite of those challenges, Landry’s general outlook for Prime Now remains a bright one, as she tells Re/code: “Part of what we do really well as a company is invest around the concept of efficiency. That’s the challenge I’m most excited about.”