Amazon (AMZN) is offering one-hour delivery of thousands of basic products to its Prime customers in Manhattan.
"Everyone wants to reduce what I call friction in the buying process. That's what Apple Pay was all about, you just hold up your phone and you pay for something," Dan Ackerman, senior editor at CNET, told CBSN anchor Jeff Glor. "If you order something from Amazon, you have to wait a day or two to get it. If they can get it to you that day, then it's even easier for you to kind of make an impulse purchase."
The online retail giant rolled out the service, known as Prime Now, to select areas of Manhattan on Thursday. Roughly 250,000 items are available for immediate delivery, including household items like paper towels and batteries.
Amazon says Prime Now is available to customers who are already enrolled in Amazon Prime, a membership service that costs $99 a year. The one-hour delivery costs $7.99 but the company also offers two-hour delivery for free.
According to Ackerman, other companies tried similar projects in the early days of the Internet but failed because they expanded too fast.
"It's a huge expense. The manpower, the infrastructure to not just put something in a box and mail it but to actually put it on the back of a bike messenger in a city and send it out" will be difficult for Amazon to overcome, Ackerman said.
Customers can place orders through the new Prime Now app, available on Apple and Android devices. The company says it hopes to expand the service to additional cities in 2015.