Ep. 027 Keyword Podcast: Head of Prime Now Shares what Sellers Need to Know

April 24, 2017
Ep. 027 Keyword Podcast- Head of Prime Now shares what sellers need to know

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This week we have another Amazon Executive on the podcast, Stephenie Landry. She’s the Vice President over Prime Now.

“History tells us that consumers are going to constantly demand the best and shipping speed is something that over the past 20 years has shrunken incredibly,” Stephenie says.

Stephanie was recently at the Shoptalk Conference in Las Vegas, which is where the audio for this episode is from.

Stephanie Landry, VP Amazon Prime Now, is this week's "Amazon insider." 

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Show Notes:

Ep. 027 Keyword Podcast: Head of Prime Now Shares what Sellers Need to Know

This week we have another Amazon Executive on the podcast, Stephenie Landry. She’s the Vice President over Prime Now.

“History tells us that consumers are going to constantly demand the best and shipping speed is something that over the past 20 years has shrunken incredibly,” Stephenie says.

That’s what Prime Now does. It’s shrinking delivery speed dramatically. Prime Now promises that you’ll get your order in two hours instead of two days. Prime Now also offers one hour delivery for an extra fee of $7.99. It’s only available for Prime members in select cities. So far Prime Now is in more than 45 cities worldwide, but it’s constantly adding new cities.

Prime Now is perfect for urgent situations like getting medicine for a sick child or a last minute decoration for a party, but Amazon wants it to be a way to help people enjoy more time in their day.

“The most important feature of the product we’ve created is the time we give back to our customers because being able to skip that trip and not have to make that chore base shopping [trip],” Stephenie says.

The audio for this episode comes from a recent Shoptalk conference in Las Vegas. Stephenie shared three things that Amazon merchants need to know about Prime Now.

The first thing you need to know is that fast delivery is expensive. In 2016, Amazon spent nearly $7.2 billion in shipping and fulfillment costs. That’s up more $2 billion in 2015. Now that isn’t all from Prime Now, but it is a contributor.

“Ultra fast shipping is an expensive proposition. It’s not easy to do and it’s not easy to do inexpensively but the only way to learn about it is to be in the game,” Stephenie says.

And Amazon let’s sellers be in the game of fast shipping without requiring them to foot that $7 billion bill.

In the future, customers will continue to expect faster shipping. There’s no going back after shoppers have come to expect two day shipping. Right now even five days feels like a long time to wait for a product. So, if you aren’t using Fulfillment by Amazon, change that. Using FBA makes your products Prime eligible. That means if your products are in a Fulfillment Center near a Prime Now city, they can be eligible for even faster shipping.

When it comes to the high shipping costs, it’s something amazon is going to keep doing simply because their customers love fast shipping. Amazon will look past the cost and figure out how to make it work to keep their customers happy.

“When I think about the time that I spend as the leader of this business, I don’t spend most of my time thinking about delivery costs or costs at all. Costs are important but I really think about customer love. How do I make a product or how does my team make a product that customers really really love and are passionate about?” Stephenie says.

The second thing you need to know, Prime Now creates even more opportunity for local companies. If you order from Prime Now in New York you can order food from Eataly.
If you order from Prime Now in Seattle you can select products from Bartell Drugs. If you order from Prime Now in Chicago you can pick produce from Plum Market.

Now Eataly, Bartell Drugs and Plum Market may not mean anything to you, but they’re all beloved businesses unique to those cities. Prime Now gives shoppers in those zip codes access to their inventory along with delivery in two hours.

“It’s completely in our company’s culture and history to work with other businesses and the reason is because other businesses offer really great new selection, really great customer service they’re known for, they’re brands that are known for something,” says Stephenie, “With Prime Now what we’ve chosen to do is partner with local, beloved brands in a few specific categories, things like grocery, pharmacy, alcohol, beauty and restaurant delivery, things that people typically need fast.”

Prime Now is doing for local businesses what the Amazon Marketplace has done for small businesses. It’s creating a platform that gives them access to Amazon’s customers.

“Working with third parties has been great with our customers because it turns the application into a portal where they can get so many different types of things,” Stephenie says.

Prime Now is also hiring delivery drivers. Think an Uber type service for deliveries. It’s called Amazon Flex.

“It’s a program that allows people to sign up as delivery drivers on behalf of Amazon,” says Stephenie, “They’re independent contractors so you get to be your own boss, set your own hours and those drivers are making between $18 to $25 an hour.”

The third and final thing to know, Prime Now will keep growing. Right now it’s in 30 cities in the United States. When we first talked about Prime Now at the end of February, they were only in 22 cities in the U.S. at the time.

Will they be available in every zip code in the United States one day? Maybe. More likely they’ll be available in enough cities that you will be a Prime Now customer.

“We get to offer our customers a huge amount of selection that’s really interesting and that creates more traffic which then attracts more sellers to the platform. It’s kind of a classic virtual cycle,” Stephenie says.

When you think of the future of shopping, a couple things come to mind, voice shopping and faster shipping times. Amazon already has Alexa and Prime Now working together.

“If you have an Alexa in your home and you happen to live in one of the cities where Prime Now is, if you order something we often will just deliver it via Prime Now and it will come that day within two hours,” Stephenie says.

Amazon’s ultimate goal is to give its customers more time. So for example: if you have surprise guests coming to visit or a weekly grocery store run or you’re suddenly in need of cough medicine, Prime Now wants to be the solution for you.

“When you’re starting your day and it’s sunny out and you want to do something fun but you have some chores to take of, it can help you eliminate those chores and help you do something different with your time,” Stephenie says.

Amazon’s entire company is built on creating products that customers want. They’ll continue to build out programs like Prime Now in the future. By just selling on the platform, you benefit by association.

Stephenie spoke for about 20 minutes at Shoptalk. You can watch the whole video right here.

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