retail news in context, analysis with attitude

Bloomberg reports that Amazon "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."

Indeed, a reflection of the degree to which Amazon plans to integrate Prime Now into its mainstream business is the decision to run the service on its main website, and not just via the Prime Now app on smartphones, as has been the case to this point. "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," the story says. "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."

Prime Now currently operates in about 20 U.S. cities and London, and includes not just products from Amazon distribution facilities, but also from local restaurants and stores; two-hour deliveries are free for those paying $99 a year for Amazon Prime, and one-hour delivery costs $8.

The story says that "Amazon 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 e-mail promotions sent to Amazon customers, which Amazon said have a stand-alone value of $100,000, according to the documents reviewed by Bloomberg."
KC's View:
Amazon's Prime customers are its best, most frequent and most profitable customers, and Prime Now shoppers tend to be even more dedicated than just regular Prime members. Call it the ecosystem effect ... the more you buy into it, the more you buy.

I've begun to think that Prime Now will be more important to Amazon's growth and sustainability as a business model than Amazon Fresh ... or that maybe there will be a coalescing of the two initiatives over time. It just would seem to make sense.