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Amazon may be facing challenges with its physical stores, but its delivery is stronger than ever. The e-commerce giant has made significant strides in logistics, offering faster and more efficient delivery than rivals like Walmart and Target.
In 2024, Amazon (AMZN+1.90%) set new delivery speed records, with over 9 billion items arriving the same or next day globally, the company said in a statement on Tuesday. Prime members saved roughly $95 billion on free delivery last year, with U.S. customers saving over $500 on delivery fees on average, it added.
“We aim to keep exceeding expectations and help members get more of what they need and want at record speeds,” said Doug Herrington, CEO of Worldwide Amazon Stores, in a statement.
The company’s success in delivery can be attributed to ongoing investments in its fulfillment network, including expanding Same-Day Delivery. Amazon increased the number of Same-Day Delivery sites in the U.S. by more than 60%, now reaching over 140 metro areas. Additionally, Amazon expanded its offerings of everyday essentials – such as health, beauty, baby, and pet products – to deliver 50% or more of these items the same or next day compared to previous years.
Since the launch of Prime in 2005, Amazon says its improved efficiency by dividing operations and transportation networks into “smaller, easier-to-serve regions.” This allows the company to stock up on high-demand items locally, shortening the distance for delivery drivers.
Amazon’s physical retail efforts, though, have faced significant hurdles. The company has closed several locations, including clothing stores and its Fresh Pickup grocery outlets. While Amazon has scaled back its cashier-less Amazon Go stores, it continues to license its “Just Walk Out” technology to other companies — and has insisted it hasn’t been used to spy on customers.
One notable exception is Whole Foods. Since Amazon acquired the grocery chain in 2017, it has seen consistent growth, standing out as a rare success in its brick-and-mortar portfolio.
Despite struggles in physical retail, Amazon remains a leader in delivery, surpassing traditional retailers like Walmart and Target, particularly in speed and convenience. The rise of locked up-items in stores by these competitors has only further solidified Amazon’s edge in delivering items quickly.
During last year’s Prime Day events, Amazon reported record online sales, making the two-day shopping event the biggest of 2024.