Amazon.com Inc. (AMZN) has competitive advantage as it continues to build out its same-day delivery capabilities, powered by AMZN‘s acquisitions of Quidsi brands and the Kiva System, says Brian Pitz, Managing Director and Senior Research Analyst at Jefferies & Company, Inc.
“Amazon will continue to raise the bar and provide consumers with the merchandise that they thought they would receive in two days, but actually receive in one day or less. Amazon already delivers this level of service in many markets such as New York or San Francisco. We have witnessed consistent best-in-class, one-day or even same-day delivery on products from some of Amazon’s Quidsi brands such as Diapers.com or Soap.com, or even Zappos,” Pitz said.
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The differentiator with Quidsi and Zappos is that both use the Kiva System, also owned by Amazon, Pitz says. The Kiva System is optimized for the standard-size packaging that Quidsi brands use, therefore improving productivity exponentially, Pitz adds.
“There are a ton of productivity improvements with a Kiva-based system, and we believe that Amazon will continue delivering items to consumers in a shorter duration than they expect through those properties in a growing number of markets,” Pitz said. “Amazon is pushing ahead to figure out even more efficient means of delivering goods. And while the company does not comment, we do believe more efficient delivery will be a bigger piece of the experience for Amazon consumers longer term.”
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