Amazon Milestone: ‘Prime Now,’ 1-Hour Delivery, in London

Amazon’s ‘Prime Now’ has made its way across the pond, launching in London, said Venture Beat yesterday. Thousands of products are now eligible for

Amazon’s ‘Prime Now’ has made its way across the pond, launching in London, said Venture Beat yesterday. Thousands of products are now eligible for the one-hour delivery service which is available exclusively to Amazon Prime members in London for £6.99, or within a two-hour, same-day window for free between 8 am and midnight, 7 days a week. Orders must be placed using the Amazon app (iOS and Android), where subscribers can also track deliveries in real time. The Verge reported that the minimum order for either delivery option is £20.

Amazon Prime Now

        Amazon previously launched Prime Now in the U.S. last December, starting with Manhattan, and then to seven additional U.S. markets. London is the first city outside the U.S. to get Amazon’s ‘Prime Now’ one-hour delivery service, making home essentials, electronics, office supplies, toys, and food and drink accessible to Prime Now users in more than 70 postal codes.To be eligible for these same-day shipping deals, customers must have an annual subscription to Amazon Prime which costs $99 in the U.S. and £79 in the U.K. An Amazon Prime subscription also includes instant movie and TV streaming and unlimited online photo storage.Reader tweets about Prime Now (#primenow) give the service rave reviews, saying items were delivered in 34, 40 and 47 minutes. One subscriber said, “It was so easy I feel dirty.” Here’s a tweet from another satisfied customer:

LeeBee

      In its London roll-out video, Amazon promises, “It’s so easy you’ll wonder how you ever lived without it!”Insider Take:Now available in 8 U.S. cities, Amazon Prime Now must be sufficiently successful to expand to London. Will this program be successful in the long run? It’s hard to say, since it is so new, but presumably Amazon wouldn’t have launched this in London if it wasn’t financially viable. The big question is who will be attracted to the one and two-hour delivery services. Are they willing to pay extra for the one-hour delivery? Will the £6.99 cost cover Amazon’s expenses to provide the service? Is Amazon charging enough annually to cover its costs?The first quarter financial statement shows a net increase in net service sales year over year of $1.6 million, but it isn’t broken out by type of service. We’ll be interested to see what cities are next and if Amazon keeps its pricing the same. We’ll also watch for the second quarter financial statement, which should be released soon, to see if it offers any insight.We like that Amazon has a separate app for the Prime Now service. It makes its use quick, easy and exclusive! This is also a great way to test the app as its product evolves. Right now, for example, when searching for a product within the app, the search results only include products that qualify for quick deliver, according to Geek.com.Google is testing a similar concept with its Google Express program. Traditional retailers like Macy’s and The Gap are even getting into the act, offering free shipping, in some cases same day shipping, trying to keep up with Amazon.What can subscription companies learn from this? It is OK to emulate big companies like Amazon, and to take risks. You can protect yourself from that risk by testing your subscription services in small markets. Don’t be left behind – try, test, tweak, repeat. 

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