Amazon Prime plans to replace free two-day shipping with free one-day shipping
Amazon plans to make one-day shipping the new standard for Prime members, CNET reports the company said in an earnings call Thursday. Chief Financial Officer Brian Olsavsky said they are working away from two-day shipping.
"We're currently working on evolving our Prime shipping program, which has historically been a two-day program, to a one-day shipping program," Olsavsky said during the company's first-quarter 2019 earnings call, according to CNET. There is not currently a set date for the launch, but Olsavsky said "it will take us a significant amount of time to achieve."
Amazon expects to spend $800 million next quarter to make the transition. That investment will go toward improving warehouses and delivery infrastructure. Due to the large investment, Amazon predicts its earnings will drop below expectations next quarter.
While Amazon already offers one-day and two-hour shipping options to Prime members, the options are currently only available for certain products in certain locations, and sometimes there are additional costs. Olsavsky said that the new plans will expand the program to more products and more zip codes. Additionally, one-day shipping will become the default, not the exception.
The change will first roll-out across North America before expanding globally to Amazon's more than 100 million Prime customers. The retail giant may be incentivizing customers to stay amid increased competition and changes to Prime — the company recently raised its Prime membership cost to $119 a year, an increase of $20.
