Amazon reached a new milestone in its attempt to provide customers with faster delivery speeds last year — all while getting a last-minute order delivered just before Christmas.
The last Same-Day delivery order placed on Christmas Eve happened at 5:00 p.m. PT in Orange County, California, and was delivered less than three hours later, arriving at 7:35 p.m. PT. That marks the shortest turnaround time for the online retail giant.
The speedy delivery underscores the rapid expansion Amazon has made when it comes to Same-Day or Next-Day deliveries. The retail conglomerate shipped more than 4 billion packages within 24 hours in the U.S. and 2 billion more across Europe, which the company touted as a “massive accomplishment.”
Same-day delivery has changed the online retail landscape as customer expectations haven risen to the point where it’s starting to exceed what is physically possible. According to Invesp, 51% of retailers have same-day delivery, and 65% plan to offer it within two years. This leads consumers to expect same-day options, with 49% saying this option encourages them to shop online.
About 56% of online customers now expect same-day delivery, and 61% said they would pay more for the convenience. Currently, 96% of customers consider “fast delivery” to mean same-day and 25% of shoppers would abandon their online cart if the option wasn’t available. However, that’s still not fast enough for the majority – 61% said they want packages delivered within 1-3 hours of placing an order.
During the fourth quarter of 2023, Amazon increased the number of items delivered the same day or overnight in the U.S. by more than 65% year-over-year. In the U.K., more than 70% of Prime orders arrived that day or the next during the same period.
The company has been decreasing delivery times by shortening the distance with more fulfillment centers — part of a heavy investment made during the pandemic when everyone was ordering online. Amazon added nine new dedicated sites last year and can now serve 18 additional U.S. cities. The company now has 55 dedicated hybrid Same-Day delivery sites across the U.S. – part fulfillment center and part delivery station.
Amazon also offers Same-Day delivery through the Amazon Pharmacy in Seattle, Austin, Indianapolis, Miami, and Phoenix.
The additional fulfillment centers breaks delivery sites into smaller regions. In-region fulfillment centers ship to delivery stations, which helps reduce the number of stops per package and decreases the company’s reliance on air transportation. For example, the company shortened the average distance each package traveled in Europe last year by 25 kilometers, when compared to 2022.
Amazon shipped 600 million packages “in-region” last year. The company plans to expand its delivery network to reach more rural customers. Amazon will also launch “tailored” delivery options in more densely populated areas, including bikers and walkers, and enlist local businesses to complete last-mile deliveries.
The company now offers Same-Day delivery in more than 110 U.S. metro areas, including San Francisco, Boston, Atlanta, Cedar Rapids, Daytona Beach, and Baton Rouge. It has 135 cities and towns across Europe, such as London, Paris, Berlin, Glasgow, Lille, and Bremen. Amazon plans to add new sites around the world this year.
The spike in delivery speeds comes as USPS struggles to deliver packages, with some piling up in the Houston facility for weeks or months, according to KHOU11. Amazon, which also relies on USPS, has an extreme advantage in that it can get packages delivered at all, but offering nearly guaranteed same or next-day delivery is sure to be a draw for customers waiting months for packages through other means.
Also in Texas, the Prime Air drone delivery program in College Station has clocked the fastest delivery times during the fourth quarter of 2023. The quickest “click-to-delivery” order was 15 minutes and 29 seconds. Prime Air will expand to the U.K., Italy, and a new U.S. location this year.
The company has also improved inventory placement, implemented artificial intelligence to fill orders, and built out its Same-Day delivery service. Amazon has refocused its inventories to place products customers from particular regions want most at local fulfillment centers. This allows workers to complete an entire order at one time from the closest location.
Amazon aims to reach even faster delivery speeds in 2024 by adjusting its delivery and fulfillment centers with bee-like precision while expanding Same-Day delivery services to include more locations. Last year, Amazon introduced a robotics storage system called Sequoia to a fulfillment center in Houston, Texas. This lets Amazon identify and store inventory up to 75% faster and, when integrated with other technologies, can reduce the time it takes to process an order by up to 25%.
The system can help reduce workplace injuries by collecting inventory totes and bringing them to workstations, reducing the time an employee is bending or squatting to retrieve products. Amazon will launch Sequoia in more locations throughout 2024.