Amazon has told members of its Prime scheme in the UK that it will start charging for same-day delivery on some orders from 18 September.
Where available, same-day delivery will attract a fee of £1.99 for orders under £20. The perk used to be included in Prime’s subscription price.
The fee for customers who are not Prime members will remain at £5.99.
Prime members that spend over £20 will continue to get free same-day delivery if it’s available on their order.
Amazon did not specify the reasons for the move but told customers in an email outlining its plans that it was investing to improve its same-day delivery service.
Following the news, some prime members took to social media to share their grievances, stating they would be cancelling their subscriptions.
Online retailers have faced rising delivery costs over the last couple of years due to higher fuel and staffing costs.
Amazon has been working to optimise its delivery network coming out of the pandemic, allowing it to increase delivery speeds and lower costs.
After recently posting improved quarterly results for its retail operation, Amazon’s Chief Executive Andy Jassy said: “We continued lowering our cost to serve in our fulfillment network, while also providing Prime customers with the fastest delivery speeds we’ve ever recorded.”
CFO Brian Olsavsky noted that the quicker delivery speeds had led to Prime customers “shopping more often”
It was reported earlier this year that the online retailer had started offering US customers $10 to pick up some purchases rather than have them shipped to a home address.
NAM Implications:
- Traditionally, Amazon were prepared to lose money on low-value orders…
- …in exchange for life-time value of regular Prime customers.
- Something has to give in the Amazon business model…
- Especially given the apparent difficulties experienced by disaffected customers attempting to cancel Prime membership.
- Watch this space…
