Amazon’s Move to One-Day Shipping Propels Sales

Amazon’s Move to One-Day Shipping Propels Sales

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Since rolling out one-day shipping last year, Amazon's growth in retail ecommerce has accelerated. We forecast that Amazon ecommerce sales worldwide will top $404 billion by the end of this year.

That’s undoubtedly a significant increase from 2018—before the one-day shipping rollout—when sales reached $292.97 billion. We anticipate ecommerce sales will continue to rise over the forecast period, growing to $468.78 billion by 2021.

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"Amazon's move to one-day shipping has opened up new avenues of growth for the company," said Cindy Liu, senior forecasting analyst at eMarketer. "It allows them to compete for purchases that shoppers need right away and would otherwise go to a store to get. This puts Amazon in a great position to capture share in new product categories like consumer staples."

And so far, the results speak for themselves. An October 2019 survey from CivicScience points to how much Amazon’s free one-day shipping is paying off. It found that a plurality of US internet users would rather order a low-cost item (less than $5) via Amazon than buy it in-store.

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Not only has Amazon's investment in faster shipping helped drive growth, it's helped propel other business segments within the company. The convenience, selection and fast delivery are helping to attract new Prime subscribers, Liu said.

We expect that more than half of US households will have a Prime subscription this year, and that figure will reach nearly six in 10 households by 2022.

And while Amazon Prime members like the membership because of its features—particularly Prime Video and exclusive deals at Whole Foods—a large share prefer it for its free shipping. Roughly 83% of US Amazon Prime members polled by Feedvisor last February said free shipping was their favorite part of Prime.

"The best way to get people to spend more on Amazon is to first get them to sign up for Prime," Liu said. "That's why Amazon keeps adding benefits to Prime like video and music streaming, discounts at Whole Foods and now the latest perk: faster shipping with one-day. This makes Prime even more attractive, and it appears to be generating the intended effect of boosting more subscribers."

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