Amazon plans a big push for Prime Now fast delivery
April 4, 2016 12:45 PM
(Bloomberg)—Amazon.com Inc. plans to broaden the reach of its fast delivery service Prime Now, and is selling major brands promotional deals connected to the expansion, a sign the world’s largest Internet retailer is satisfied with early results from the nascent offering.
The service, now only available through the Prime Now app on smartphones, will be run on Amazon’s website starting in May, according to documents reviewed by Bloomberg.
Getting Prime Now on the web puts the service in front of a larger audience, many of whom may not have downloaded the app on their phones. While shopping on mobile devices is expected to reach $96.2 billion in the U.S. this year, that represents a quarter of all e-commerce, according to the research firm EMarketer.
Amazon, No. 1 in the Internet Retailer 2015 Top 500 Guide, is trying to sell advertising space to major brands for the web launch, promising them visibility with tens of millions of Amazon shoppers. The premium "Launch Hero Package" would cost $500,000 for about two weeks of placement on Amazon’s website associated with the rollout. That price includes email promotions sent to Amazon customers, which Amazon said have a stand-alone value of $100,000, according to the documents reviewed by Bloomberg.
An Amazon spokeswoman declined to comment.
Amazon launched Prime Now in New York City in December 2014 and has since expanded it to about 20 U.S. cities and London. It has also broadened the service to include delivery from local restaurants and stores, not just products from Amazon warehouses. Two-hour deliveries are free for those paying $99 a year for Amazon Prime, and one-hour delivery costs $8.
Rush delivery brings instant gratification to the convenience of online shopping, increasing its threat to bricks-and-mortar stores.
The web rollout tied to an ad campaign suggests Amazon is getting more aggressive in charging brands for access to its customers. This is similar to how supermarkets charge for more-visible shelf space in physical stores.
Amazon is working to get more shoppers to subscribe to its Prime service, which also includes video and music streaming and photo storage. In February, it raised the minimum order size for free shipping to $49 from $35 for non-Prime shoppers. Prime subscribers spend more with Amazon than non-Prime members.