Amazon Delivery Speed Update - Rapid Improvement

Fast, “free” shipping - nobody can argue with that. Amazon has invested billions of dollars to continuously reduce delivery time for Amazon orders. They have built more and more distribution centers, with a major focus on smaller, more local sites that bring the inventory closer to shoppers’ delivery addresses. They continue to develop robotics to speed up steps of the picking and packing and sorting functions in those warehouses.

Last week they announced a next generation of AI to support distribution optimization. They want to get better and better at having the right inventory in the right warehouses and distribution centers at the right time. They even introduced smart glasses for delivery drivers that can do everything from confirming they picked up the right package and directing them to the correct front door to warning them about a nearby dog.

These investments can pay off in several ways. They can reduce Amazon’s cost for each delivery. They can reduce the capital that Amazon needs to invest in inventory, warehouses, and ironically, more logistics technology. And they can make Amazon an even more desirable place to shop.

CIRP has more than 10 years of data reflecting how quickly Amazon shoppers received their most recent orders. The long-term improvements have been significant. Now we want to see if the current investments are having an impact, so we compare Amazon customer experience over the past two years. Orders received the same-day or next day have grown from 19% in the twelve-months ended September 2024 to 24% in the most recent twelve-month period (Chart 1).