Technology

Amazon's shift to one-day Prime shipping could prove a big challenge to 2 breeds of retailers (AMZN)

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  • Amazon announced in April that it would be shortening its two-day shipping offering to one day for all Prime customers.
  • Two-day shipping was transformational and proved e-commerce was a real force in the retail industry, according to Micahel Krakaris, founder of third-party shipping and logistics firm Deliverr.
  • One-day shipping has a chance to matter just as much, for different reasons.
  • The new speed could completely supplant even more shopping trips, like those for need-it-soon-but-not-right-now essentials from drug or convenience stores
  • Visit Business Insider’s homepage for more stories.

Two-day shipping was a revolution.

One-day shipping, which, Amazon announced in April, is starting to roll out to all Prime customers nationwide to replace two-day shipping, has the same potential.

“Two-day shipping made e-commerce relevant,” said Michael Krakaris, founder of Deliverr, a third-party shipping and logistics firm that works with third-party sellers and merchants on platforms like Amazon, Walmart, and Ebay.

Before, e-commerce orders took a long time, and actual arrival times would often vary greatly. With two-day shipping, customers could predict when they would need or want an item by, and the regularity of Amazon Prime’s guarantee meant they could order it to fit their schedule.

Read more: A startup is making it easier for Amazon’s sellers to fulfill orders, and it’s a hint at how one-day shipping could become a reality

But even shaving just 24 hours from the time something arrives could have huge psychological benefits for customers who are mentally preparing for when an item is going to come.

“With one-day, you’re changing the game, and now you’re changing the framework of how buyers think,” Krakaris said.

“The way they’re now going to think about it is … should I go to the Walgreens down the street? Or should I just buy it on Amazon?”

Before, customers could go to drugstores or convenience stores for need-it-now essentials, but a one-day shipping promise changes the calculus.

“With two-day shipping it was: ‘I’m going to go to Walgreens down the street. I’m only going to buy something on Amazon if I can’t find it at Walgreens,'” Krakaris said. “Now you’re asking yourself, should I really even walk there? Should I even really stay and wait in the checkout line? [It’s] going after those convenience stores.”

Should drugstore chains like CVS, Walgreens, and Rite Aid fear the coming of one-day shipping? It’s still unclear how the offering will shake out and how customers will respond.

But in a best-case scenario, where the 100 million items currently available for Amazon Prime’s two-day shipping are migrated to one-day, some sales could certainly be captured by the e-commerce giant.

An Amazon spokesperson gave Business Insider this statement in response to a request for comment:

“We focus on customers and innovating and speeding up delivery on their behalf. We’ve offered increasingly faster shipping options for a number of years — introducing one-day and same-day delivery, as well as one- or two-hour delivery with Prime Now. In addition to the many delivery options we offer today, we have begun to offer free one-day delivery as the default speed. We significantly expanded one-day selection and the delivery areas starting in early April and we aren’t done. As we mentioned before, we will keep adding more and more products and expanding our delivery areas to ensure Prime members get their products faster than ever.”

SEE ALSO: Amazon’s latest store proves the cashless dream is dead

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