Bay State convenience stores could be in for a world of pain in 2015 if Amazon speeds up and expands its same-day delivery services.
All signs point to Amazon vastly growing its Massachusetts footprint in the next year, and CEO Jeff Bezos has made no secret that instant delivery of goods to consumers is the end-game of America's biggest e-commerce giant. That means we may see the same one-hour delivery window that is currently being piloted in Manhattan — and that spells disaster for the sales volume of corner marts, which will simply no longer seem convenient.
A 1-million-square-foot fulfillment facility in Fall River, with part of the land located in Freetown, is on track to begin construction in 2015. Another 328,000-square-foot warehouse is planned for Stoughton, fueled by $2.89 million in state tax breaks over the next decade.
It's hard to blame the state for luring Amazon: The proposed facilities and its already existing properties stand to create many Bay State jobs, including an estimated 1,000 positions in Fall River and another 125 in Stoughton.
Amazon has been growing its same-day delivery service for years, and it's already available in parts of Boston and a dozen other U.S. cities. It's unclear how popular the service is locally. I've never used it, and you have to hunt around the website to find what's available for same-day delivery. But expect Amazon to start heavily promoting the service as part of its Prime subscription loyalty program in 2015.
"Our long-term vision is that customers can order and receive a sellers' product the same day anywhere in the world," reads a job listing posted by Amazon in late October, one of several open positions that point to a major hiring blitz to extend the same-day strategy across the globe.
Manhattan appears to be the test city for that strategy. One week before Christmas, Amazon launched the Prime Now app, which enables one-hour delivery for Prime members in parts of Manhattan. With more than 25,000 items available, delivery within an hour costs $7.99 and Prime members can select a two-hour delivery window from 6 a.m. to midnight for free. Amazon's video commercial for the service says customers can order everything from coffee grinders to TVs and have them within an hour.
Considering Amazon's shipping costs were more than double its shipping revenue for most of 2014, I'm skeptical that they'll find a way to make money on same-hour delivery anytime soon. Let's just hope they don't put too many convenience stores out of business before they raise their prices to the intended rates.
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