Does PrimeNow.com Put Amazon One Step Closer to Becoming a Logistics Company?
In a blog last year, venture capitalist Bill Gurley shared something Jeff Bezos told him about Amazon’s corporate philosophy. “When you have something you know is true, even over the long term, you can afford to put a lot of energy into it,” Bezos apparently said. He then told Gurley that what would always be true for Amazon customers is the prospect of low prices and speedy shipping.
Amazon’s unveiling of PrimeNow.com, a website dedicated to the two-hour delivery service that has up to now been offered solely via mobile app, signals not only that the Alpha e-com is ratcheting up competition with supermarkets and drugstores, but also that it may be serious about competing with the U.S. Postal Service and UPS.
“One of the things about a smartphone is that it’s hard to search millions of products on them, and Amazon has millions of products,” says David Rekuc, marketing director of Ripen e-commerce. The implication is that Bezos and Amazon don’t plan to waste costly same-day shipping infrastructure on Tide alone. Maybe if volume scales high enough, Amazon could supplant the bike messengers and Uber drivers delivering groceries for them with its own fleet of trucks. And perhaps those trucks could also carry sneakers, table saws, and TV sets.
“I think [PrimeNow.com] creates the opportunity to pull more velocity into the Amazon funnel that FBA sellers can leverage,” says FreeShipping.com CEO Tom Caporaso, referencing third part merchants that have their products fulfilled by Amazon. “They already have a decent sized Amazon Fresh truck fleet on the west coast. They’ve expanded PrimeNow to 27 markets, and if they can open up more product channels there the conversation about their getting into the logistics business expands, too.”
Amazon christened its own air freight operation in March when it signed a deal to lease 20 cargo planes from with Air Transport Services Group. The online retailer also is a pioneering proponent of using drones to make individual deliveries to homes.