Amazon.com Inc plans to deliver packages to members of its loyalty club Prime in just one day, instead of two days, part of a spending ramp-up that may curb near-term profits and will up the ante for retail rivals such as Walmart Inc.
Amazon said faster shipping will come to customers around the world and said its profit more than doubled in the first quarter, trouncing estimates thanks to soaring demand for its cloud and ad services. Amazon expects to spend $800 million toward the shipping goal in the second quarter alone.
“There’s a lot of error bars around this programme, especially from the cost side,” Amazon’s Chief Financial Officer Brian Olsavsky said. “We (are) again, trying to take advantage of the fulfilment capacity and transportation capacity, especially with third-party partners, that we have.”
US rivals Walmart and Target Corp have steadily rolled out two-day shipping, albeit on far fewer items than Amazon Prime customers can get at that speed for $119 a year in the United States.