Amazon is doubling down on ultra-fast deliveries with plans to open 1,000 small delivery centers across U.S. metro areas and suburbs, according to Bloomberg. The expansion will allow the e-commerce giant to take on Target and Walmart.
“The facilities, which will eventually number about 1,500, will bring products closer to customers, making shopping online about as fast as a quick run to the store. It will also help the world’s largest e-commerce company take on a resurgent Walmart.”
The small warehouses would support Amazon’s efforts to provide customers with two-day and or one-day deliveries for specific items, even if a demand surge is seen. The primary strategy here is to compete with Walmart and Target’s same-day delivery schemes.
Bloomberg explains the strategy behind additional micro warehouses:
“Historically, Amazon gnawed away at brick-and-mortar rivals from warehouses on the exurban fringes, where it operated mostly out of sight and out of mind. That worked fine when the company was promising to get products to customers in two days. Now Walmart and Target Corp. are using their thousands of stores to beat Amazon at its own game by offering same-day delivery of online orders. Walmart also recently started is own Prime-style subscription service, upping the competitive ante.”
The new strategy is already working at a fulfillment center in Holyoke, Massachusetts, situated near a dead mall, and down the street from more than 600,000 people.
Amazon’s plan to add micro fulfillment centers is in response to its handling of the virus pandemic. The company had to suspend many non-essential items to deal with the increased demand following the coronavirus outbreak. This created a public backlash for slow shipping times. Customers started to abandon the e-commerce giant for quicker shipping options with Walmart and Target.
During March and April, Amazon announced 175,000 new hires to keep up with demand. Even after lockdowns eased, people continued to order online as the coronavirus cases surged in the summer. Amazon hired 100,000 additional workers in September ahead of the holiday season.