Amazon's Sunday Delivery in More Cities - Analyst Blog


Shutterstock photo ( AMZN ) recently announced that it will expand Sunday package delivery service to nearly 15 cities. The cities include Indianapolis; Lexington and Louisville, KY; New Orleans and Shreveport, LA; Cincinnati and Columbus, OH; Oklahoma City; Philadelphia; Dallas, Houston, San Antonio, Austin, Waco and College Station, TX.

Amazon introduced Sunday package delivery service in November 2012 in New York and Los Angeles. The service allows Amazon Prime members, who receive unlimited two-day shipping, to order online by Friday and receive the items by Sunday through the U.S. Postal Service. The service, available to all Prime members for free, will offer millions of items including baby supplies such as newborn apparel, books and toys.

With a view to make this expansion a success, Amazon has already started investing in warehouses.

This is the latest effort by the company to expand operational activities (shopping) and attract new customers after it increased the prime membership annual fee to $99 from $79. Recently, Amazon and Twitter ( TWTR ) sealed a deal to enable Twitter users to shop directly from Amazon's e-Commerce portal. In April, the giant online retailer released an Android-based Internet video-streaming set-top box named Fire TV. Additionally, Amazon launched Prime Pantry, a grocery delivery service, for its Prime members in the same month.

We believe the company's ever-expanding content portfolio will to attract subscribers despite the price rise.

However, significant competition from eBay ( EBAY ), Google ( GOOGL ) and other online retailers remain a matter of concern. Furthermore, Amazon's continuing investments in fulfillment centers could hurt profitability, going forward.

Currently, Amazon has a Zacks Rank #3 (Hold). Another stock that has been performing well and is worth considering include Rovi Corporation ( ROVI ), carrying a Zacks Rank #1 (Strong Buy).

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

This article appears in: Investing , Business , Stocks
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