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Amazon Expands Prime Now 1-Hour Delivery Service to Denver
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Amazon.com Inc. (AMZN - Free Report) continues to expand its Prime Now Service. Denver is the latest addition to the list of cities receiving the one and two-hour delivery service.
The delivery service, Prime Now, will now offer many household, daily essentials, electronics, games and outdoor supplies among others, to members in Denver. Moreover, Denver Prime members will also have the option of getting grocery products from Sprouts Farmers Market, including seasonal and organic produce, fresh meat and seafood, baked goods and natural vitamins.
Also, customers will be able to use Amazon’s speaker-like home automation device, Alexa, to order from Prime Now.
Undoubtedly, the new destination will help the company attract more customers to the $99/year Amazon Prime program, which is a significant revenue source.
Stock Performance
In the last one year, shares of Amazon have underperformed the Zacks categorized Electronic Commerce industry. While the industry gained 50.3%, the stock returned 34.4%.
Despite the underperformance, we believe there are a lot of factors that could turn the wheels in Amazon’s favor. These include expansion of Prime, Fulfillment by Amazon, its grocery initiatives and efforts around Amazon Web Services (AWS). The company capitalizes on its execution strength, robust performance and technological prowess.
Amazon Prime Now
In Dec 2014, Amazon rolled out the one-hour delivery service in a limited area in Manhattan. Prime Now offers two-hour delivery for free and charges $7.99 for one-hour deliveries. All Prime Now items can be browsed and purchased through a dedicated app.
Now, $7.99 might seem a shade steep, if only a few items are ordered. Nevertheless, Amazon offers substantial discounts on these items. So, customers can make up for the delivery charges. Also, there is a convenience cost that comes into play.
Bottom Line
It is important to understand the nature of Amazon’s core business. It is primarily an online retailer and competes with the likes of eBay (EBAY - Free Report) and Alibaba (BABA - Free Report) . This kind of business has a very low barrier to entry. It is cheaper to set up and attracts a lot of competition. Online retailers also face competition from brick and mortar stores like Wal-Mart (WMT - Free Report) .
Therefore, carving a niche in this business demands a lot of marketing, an excellent customer-service model and a rational pricing strategy. Dealing with all three and getting it right to maximize profits requires a lot of effort.
To be a formidable player in this space, Amazon needs to consistently offer excellent services.
Prime Now will be part of an enhanced delivery strategy — an important growth driver for Amazon.
As the perks of Prime members increase, subscription rises, expanding the operating margins of the company in turn.
Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy...
Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>
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Amazon Expands Prime Now 1-Hour Delivery Service to Denver
Amazon.com Inc. (AMZN - Free Report) continues to expand its Prime Now Service. Denver is the latest addition to the list of cities receiving the one and two-hour delivery service.
The delivery service, Prime Now, will now offer many household, daily essentials, electronics, games and outdoor supplies among others, to members in Denver. Moreover, Denver Prime members will also have the option of getting grocery products from Sprouts Farmers Market, including seasonal and organic produce, fresh meat and seafood, baked goods and natural vitamins.
Also, customers will be able to use Amazon’s speaker-like home automation device, Alexa, to order from Prime Now.
Undoubtedly, the new destination will help the company attract more customers to the $99/year Amazon Prime program, which is a significant revenue source.
Stock Performance
In the last one year, shares of Amazon have underperformed the Zacks categorized Electronic Commerce industry. While the industry gained 50.3%, the stock returned 34.4%.
Despite the underperformance, we believe there are a lot of factors that could turn the wheels in Amazon’s favor. These include expansion of Prime, Fulfillment by Amazon, its grocery initiatives and efforts around Amazon Web Services (AWS). The company capitalizes on its execution strength, robust performance and technological prowess.
Amazon Prime Now
In Dec 2014, Amazon rolled out the one-hour delivery service in a limited area in Manhattan. Prime Now offers two-hour delivery for free and charges $7.99 for one-hour deliveries. All Prime Now items can be browsed and purchased through a dedicated app.
Now, $7.99 might seem a shade steep, if only a few items are ordered. Nevertheless, Amazon offers substantial discounts on these items. So, customers can make up for the delivery charges. Also, there is a convenience cost that comes into play.
Bottom Line
It is important to understand the nature of Amazon’s core business. It is primarily an online retailer and competes with the likes of eBay (EBAY - Free Report) and Alibaba (BABA - Free Report) . This kind of business has a very low barrier to entry. It is cheaper to set up and attracts a lot of competition. Online retailers also face competition from brick and mortar stores like Wal-Mart (WMT - Free Report) .
Therefore, carving a niche in this business demands a lot of marketing, an excellent customer-service model and a rational pricing strategy. Dealing with all three and getting it right to maximize profits requires a lot of effort.
To be a formidable player in this space, Amazon needs to consistently offer excellent services.
Prime Now will be part of an enhanced delivery strategy — an important growth driver for Amazon.
As the perks of Prime members increase, subscription rises, expanding the operating margins of the company in turn.
Amazon.com, Inc. Price and Consensus
Amazon.com, Inc. Price and Consensus | Amazon.com, Inc. Quote
Zacks Rank
Currently, Amazon has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.
3 Top Picks to Ride the Hottest Tech Trend
Zacks just released a Special Report to guide you through a space that has already begun to transform our entire economy...
Last year, it was generating $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for those who make the right trades early. Download Report with 3 Top Tech Stocks >>