Amazon.com Inc. (NASDAQ:AMZN) is in the news again, and this time, it is coming in from the old world. Latest reports indicate that Amazon has taken its Amazon Prime Now service to London. Amazon Prime Now was started in the United States in Manhattan, New York in December 2014.The service is now launching in Central London with plans to expand to the other postcodes by the end of the year.
What is Amazon Prime Now?
Amazon Prime Now is a higher tier of the Amazon Prime service that offers a number of perks to users. Amazon Prime costs $99 per year in the U.S. and £79 in the U.K. The appeal of Amazon Prime lies in its same-day shipping service, ad-free music-streaming, video streaming a la Netflix style, and unlimited cloud storage for photos among other things. Amazon is also reportedly thinking about crowdsourcing delivery in order to have lesser shipping costs and faster delivery schedules.
Amazon Prime Now is open to all Amazon Prime users and it offers more exclusive perks than what’s on Prime alone. Amazon Prime Now users can now order a 1-hour delivery service when they need to make urgent purchases. There’s a £20 minimum order, but this makes sense when you consider the £6.99 shipment charge on the service. If you’d rather not pay the £6.99 shipment charge and you can afford to wait another 1 hour, your purchase will be shipped for free within a two-hour delivery window between 8AM and midnight.
What Will Prime Now Do for Amazon’s Business?
Amazon Prime Now was launched in Manhattan before stretching out to other cities such as Dallas, Miami, Atlanta, and Baltimore. Now, Amazon Prime Now is launching in London. This is typical Amazon process of starting a service in the United States and then moving it over to the UK when all the kinks have been straightened out. Hence, users can expect Amazon Prime Now in the UK to progress smoothly because the firm has the benefit if insight from the U.S. operations.
Going forward, Prime Now will extend to cover all of London by the end of this year and Amazon Prime Now will be moving to other cities. The success of Amazon Prime Now in London will be a good feedback on the European front and Amazon will be able to offer a more robust service on the other side of the ocean.
The bottom line is that one-hour delivery on Amazon Prime Now will encourage more consumers to sign up for Amazon Prime. An increase in the number of Amazon Prime results into more revenue because Amazon Prime users tend to spend twice as as more as ordinary non-prime members.
An increase in the number of Amazon Prime Numbers will also lead to an increase in the number of shipments. Hence, it might not be long before Amazon considers placing adverts on shipping boxes in UK and the rest of Europe.