Amazon (AMZN) Prime users enjoy many benefits that come with their membership, which costs $139 a year. Free shipping, exclusive Prime Day deals, a free Grubhub+ membership are among the most popular.
Over 200 million people worldwide have joined Amazon Prime, and it generates a significant portion of Amazon’s revenue.
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In the company’s second-quarter earnings report for 2024, its subscription services (which includes income earned from Amazon Prime membership fees) garnered about $10.8 billion for the company during the quarter, which is an 11% increase compared to the same time period last year.
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As Amazon Prime continues to become more successful, its members will have to soon kiss goodbye a beloved perk of their membership.
The retail giant is cutting a significant part of its same-day delivery offerings by discontinuing its Amazon Today service, effective Jan. 24, 2025, after first introducing it to Prime members in 2022.
The service currently grants Prime members the ability to order products at local stores through Amazon’s website/app and have it either delivered to their doorstep or available for pickup on the same day .
Some of the retailers who are participants in the program include GNC, PacSun, Diesel and SuperDry, and they are required to maintain a “Pickup Readiness Rate” of 99%, which involves successfully packing orders within 60 minutes of receiving an order notification.
The service is free to Prime members who spend $25 or more on qualifying items If they spend less than that, they are charged $2.99 for the service.
In an emailed statement to TheStreet, an Amazon spokesperson said that the company is discontinuing Amazon Today during a time when it has “seen a growing overlap” between the program and its other speedy delivery services.
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“This will streamline our offerings for customers, and the majority of selection our customers buy from Amazon Today will continue to be available for same- and one-day delivery,” wrote the spokesperson.
The decision will also have a major impact on Amazon Today employees who will either be laid off or placed in other positions within the company.
Amazon touts record delivery speeds for Prime members after criticism
The move from Amazon comes after its CEO, Andy Jassy, claimed during an earnings call on Aug. 1 that delivery speeds for Amazon Prime members have reached an all-time high.
“So far this year, our speed of delivery for Prime customers has been faster than ever before, with more than 5 billion units arriving the same day or next day,” said Jassy during the call.
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He also claimed the company will be exploring opportunities to “further reduce costs,” which includes “further building out” its same-day facility network, and “regionalizing” its inbound network.
“With more optimal inbound inventory placement, we expect to enable faster speeds, consolidate more orders in one box, and reduce inventory transfers once items reach a fulfillment center,” said Jassy.
The improvement in delivery speeds for Prime members comes after the company previously received criticism from customers who accused the company of failing to deliver same-day and next-day deliveries on time.
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