Amazon.com, Inc. (NASDAQ:AMZN) announced Monday that it will start offering Sunday deliveries in select U.S. cities starting November 17. The e-commerce giant has partnered with the United States Postal Service for the ambitious offering as Jeff Bezos tries to weave Amazon.com, Inc. (NASDAQ:AMZN) deeper into consumers’ lives. Initially, the service will be offered only in Los Angeles and New York. The Seattle-based company will expand the service to Phoenix, Dallas, Houston and New Orleans early next year, reports Matt Clinch of CNBC.
Amazon snatches another advantage from traditional retailers
Amazon.com, Inc. (NASDAQ:AMZN) is snatching key opportunities from brick-and-mortar retailers one after another. First, it began offering same-day grocery delivery. Now Sunday delivery will further entice consumers to turn online. Customers usually avoid placing orders on Fridays because they know it won’t reach their doorstep until Monday. Sunday delivery eliminates that problem. However, analysts believe that it could prove costly for the company because of lower volumes.
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Amazon.com, Inc. (NASDAQ:AMZN) said that customers will not have to pay any additional charges for this service. They won’t even have to specify it. The company will bring eligible items from its warehouses to USPS locations, and the Postal Service will deliver them to customers. The semi-government agency has already been offering limited Sunday deliveries around the holidays. But the partnership with Amazon.com, Inc. (NASDAQ:AMZN) takes it to a whole new level.
Amazon contract a blessing for USPS
The Amazon.com, Inc. (NASDAQ:AMZN) contract comes at a time when Postal Service badly needed a financial boost. The agency has posted seven consecutive quarters of net losses as more people favor email, social networks and instant messaging. Companies like FedEx Corporation (NYSE:FDX), United Parcel Service, Inc. (NYSE:UPS) and DHL have also eaten into its market share. USPS estimates to incur $6 billion in net losses this year. It has closed several locations and proposed stopping Saturday deliveries to slash expenses.
The Postal Service said in a statement that it doesn’t have to hire additional workers. The agency has a “flexible workforce” that can show up on Sundays. Amazon.com, Inc. (NASDAQ:AMZN) said it preferred the government agency over other parcel delivery services because its technology is more compatible with the USPS.
Amazon.com, Inc. (NASDAQ:AMZN) shares were almost unchanged at $350.16 in pre-market trading.