Here's How Amazon is Tapping the On-Demand Space with Prime Now, Amazon Flex & Prime Air
The ever growing on-demand economy has recently caught the fancy of Amazon. Being known as one of the most innovative company in e-commerce sector, Amazon has now become the first company in its segment to enter the on-demand space.
Well, if this comes as a surprise to you then you must know that Amazon started a service last year by the name “Amazon Prime” to offer free same day delivery at an annual cost of $99. Amazon was quick enough to understand that consumers wanted even faster deliveries for the items they bought. It is a fact that users want everything almost instantly and that’s why the on-demand economy is flourishing at a quick pace. In order to keep up with the changing consumer trends, Amazon soon launched a new service by the name Amazon “Prime Now” where the e-commerce giant started to deliver packages within 1 hour. That’s exactly what users wanted. Although Prime Now serves a certain geographical location but huge rush of orders and the high delivery pressures forced Amazon to start a new service called “Amazon Flex”. Both these services – Amazon Flex and Prime Now are excellent segments in the on-demand space that will take Amazon ahead of its competitors by leaps and bounds. Let’s analyse the steps taken by Amazon and discuss how entering the on-demand economy is a futuristic step for the company.
Amazon’s “Prime Now” – Things delivered within 1 hour (On Demand Delivery)
Amazon does not only know the value of their customers but it seems that they also know the value of their customer’s time. After experimenting with package pick-up locations, delivery trucks and some more such innovations, Amazon has finally found their future stability in the on-demand economy.
When a user makes a demand, he expects it to be fulfilled as soon as possible. Maybe, Uber was the first company to give such an experience but it has now been introduced in almost all business verticals. Amazon delivers selected electronics, groceries, gifts etc almost instantly. Amazon’s Prime Now delivery services are available at selected locations but this is surely one thing that customers want. Here’a s brief about Amazon’s Prime Now service.
- There’s a dedicated mobile app for Prime Now.
- Prime Now offers free 2 hour delivery.
- A user has to pay $7.99 if he wants delivery within one hour.
- There’s a minimum amount order in each area.
- Orders can be fulfilled from morning till late night.
- Prime Now also offers cooked food delivery from restaurants in select cities.
Amazon Flex – Freelancers deliver packages (On Demand Workforce)
Now, since Amazon started with its 1 to 2 hour delivery service, they felt the need for a very strong infrastructure. No doubt, Amazon has hi-tech warehouses which can handle the products but there has to be someone to go out and deliver packages to customers. The irony of the situation is that these packages have to delivered within 1 hour or 2 hours timeframe. In order to expand Prime Now to more cities, the on-demand workforce is without doubt the most cost efficient & well managed delivery network.
Going on the sidelines of Uber, TaskRabbit, Postmates and other platforms in the on-demand economy, Amazon started a service by the name “Amazon Flex” where it invites people to be a part of their delivery network as an individual partner. Just as Uber or Postmates, Amazon pays good enough to its delivery partners. Here’s what Amazon Flex homepage reads.
Amazon Flex has huge potential if we talk about the future of the company. Amazon will be able to save costs and also the headache to hire permanent staff for deliveries. According to Amazon Flex website, anyone with a car and a smartphone can join and make somewhere around $18 to $25 per hour. The move has been welcomed by the gig economy workers in the areas where the service has been started.
Amazon’s Prime Air: Will drones be the Future?
Many of you might not know that Amazon is currently testing package deliveries to be made by drones. This new arm of Amazon, called Amazon Prime Air is currently in the testing phase but the drones have said to have made accurate deliveries within 30 minutes. The changing consumer trends especially the “instant gratification” makes much sense over here. Amazon is further trying to reduce the delivery time from 1 hour to just 30 minutes. Moreover, Amazon wants to move from manual delivery to automated delivery in order to serve its customers better. However, Amazon Prime Air has certain blockades including package weight, safety etc. The service has not been launched yet.
Will drone deliveries be the future? Maybe yes and maybe not. But for now, we have the on-demand workforce that is being tapped by Amazon to make quicker seliveries within 1 hour.
Amazon’s Journey: From Traditional to On-Demand
Let’s understand this with the help of a flowchart.
- Amazon – an e-commerce company.
- Normally delivers packages the next day or within 2 days.
- Adds same day delivery at an additional cost.
- Starts Amazon Prime at an annual membership fee. Delivers same day to members.
- Starts Amazon Prime Now to deliver packages within 2 hours.
- Delivers within 1 hour at an additional cost.
- Starts Amazon Flex to hire mobile workforce.
- Amazon Prime Air (Drones).
Are you an enterprise looking forward to enter the on-demand economy? This is the right time to do so. Get in touch with us and let us make you talk to the future.