00:00Amazon has made a massive, recent push to expand its same-day and next-day delivery services.
00:06This is a really big deal because they plan to reach more than 4,000 small cities,
00:10towns, and rural communities across the U.S. this year.
00:14The goal is to benefit tens of millions of customers who live in these areas.
00:19Historically, people in rural areas often live farther from physical stores,
00:23have fewer product and brand choices, and face limited online delivery options.
00:28Amazon aims to transform daily life for these rural customers by bringing them faster turnaround times.
00:35To achieve this ambitious goal, Amazon is set to invest a whopping $4 billion to triple the size of their delivery network by 2026,
00:43with a specific focus on these smaller areas across the country.
00:47Doug Harrington, the CEO of Worldwide Amazon Stores, emphasized this by saying,
00:52Everybody loves fast delivery.
00:53So, whether you live in Monmouth, Iowa, or in downtown Los Angeles?
00:59Now you are going to have the same fantastic Amazon customer experience,
01:03the ability to get the wide variety of items you need to keep your household running every day,
01:07delivered the same or next day.
01:10Examples of specific places slated for this faster service include,
01:13North Padre Island in Texas, and Asbury in Iowa.
01:16A key part of their strategy involves using artificial intelligence, AI.
01:22AI will help Amazon predict local customer preferences,
01:25allowing them to stock popular items along with products curated specifically for each community.
01:31This means everyday essentials like groceries, paper towels, diapers, or dog food will be available for same-day delivery,
01:38addressing the common need for immediate replenishment of such items.
01:41This significant expansion comes at a time when Amazon is performing well financially,
01:47with net sales increasing 10% in the fourth quarter of 2024 and 9% in the first quarter of 2025.
01:54Now, to understand how this changed their policy, we need to look back at their history.
01:59The genesis of Prime, 2007 Amazon Prime was launched in 2007,
02:04promising an unlimited next-day delivery membership.
02:06At that time, getting next-day delivery from most companies was either very expensive or simply not an option.
02:13Amazon's vision was to make fast delivery an everyday experience, rather than an occasional indulgence.
02:20A game-changer, what started as a gamble, quickly became an undeniable success,
02:25with Prime now boasting over 200 million subscribers globally.
02:29This has led to what's known as the Amazon Effect,
02:31a term that encompasses the widespread adoption of digital shopping and the subsequent rise in customer expectations and demands.
02:40Amazon's platform, with its speed, availability, and frictionless nature,
02:44has been crucial in altering and shaping customer habits,
02:47pushing buyers from traditional brick-and-mortar stores to online marketplaces.
02:52Shifting Expectations
02:53As Julie Ramhold, a consumer analyst, explains,
02:57Amazon has changed the way we as consumers expect items to be shipped out,
03:01shoppers are often impatient now and expect their items to arrive soon after purchasing.
03:06This has also forced other competitors to a step up.
03:10At its core, Amazon's strategy has always been to prioritize customer satisfaction above all else.
03:16Following the initial success of Prime,
03:18Amazon further escalated this by offering same-day delivery for certain items in some areas,
03:23which has clearly impacted customer experience positively for many.
03:28A 2024 report indicated that 80% of organizations offering same-day delivery
03:33reported higher customer satisfaction and revenue growth.
03:37Money Explainers
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