It's like spring training for retailers. The warm-weather selling season is here so it's time to get in shape for the fourth quarter. Target, Walmart and now Amazon are letting customers and the trade know that they mean business. This year it involves investments in online technologies and fulfillment.
Prominent new offers of free and fast shipping services are consumer hot buttons. Amazon (NASDAQ:AMZN) just announced "Fulfillment By Amazon Small and Light"—free shipping for items that weigh under 8 ounces and cost less than $10, USA Today reported. This program is independent of the Amazon Prime program.
"The new program provides a cost-effective way for sellers to offer low-cost items and for customers to get free shipping. It's a win-win for customers and sellers—the new program costs sellers less to ship an item than it would if they were to do it through their own fulfillment network," said Amazon spokesman Tom Cook.
Amazon is also testing a new feature called "Stream," TechCrunch reported. Stream, initially listed as "Product Hunt" on the site, is still in the testing phase and presents shoppers with a grid of product photos—mainly fashion-oriented—to browse and click to save to their own collection. Pymnts.com compared Stream to the popular Pinterest image site and noted that it is well-suited to browsing on a mobile device. Amazon has reportedly tried to emulate Pinterest before, but without success, according to TechCrunch.
The online retailer is well aware of the importance of fulfillment. Amazon is building a new hub for its "Prime Now" one-hour delivery service in Seattle and has filed planning documents with the city, GeekWire reported. The retailer is converting a building, previously a Toyota dealership, into a distribution center near Amazon's headquarters. This location is also where the AmazonFresh grocery delivery service is seeking a liquor license. Amazon also expanded its private-label program to include grocery products last week.
Amazon Prime Now launched in New York last year and has been expanding across the country, most recently into Seattle. The service, available to Prime Members, charges $7.99 for one-hour delivery and is free for two-hour delivery. Amazon also rolled out free same-day delivery for Amazon Prime members in 500 municipalities across the U.S, including Seattle.
The city block containing the Prime Now building will become part of a major Seattle development for Amazon and is not far from its main campus. Other facilities are under construction.
Amazon is built on products, pricing, e-commerce, logistics/fulfillment and data. The company is spending $1.1 billion on data centers, among other facilities, in the Columbus, Ohio, area, GeekWire reported. The development will result in 1,000 new jobs and comes after an $81 million approval in state tax incentives for Vadata, an Amazon subsidiary.
"One of the reasons we came here was the workforce," said Paul Misener, Amazon's VP of global public policy, with Ohio Gov. John Kasich in attendance.
The data centers are intended for Amazon's Web Services division. Other facilities will include fulfillment centers.
"The proposed project involves constructing new data centers to provide cloud computing services," according to an Ohio Development Services Agency document published last August and reported by the Columbus Dispatch. "The company's fixed-asset investment would be towards constructing a new building, on- and off-site infrastructure improvements, road construction, and new machinery/equipment."
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