Services & Software

Amazon offers same-day delivery to select cities

Online retailer upgrades its shipping options in time for the holiday season, also expanding its Saturday delivery options. Pricing may benefit Prime subscribers most. on Thursday announced that customers looking to get their packages sooner will have a couple new options available to them.

Amazon customers placing deliveries within the cities of New York, Philadelphia, Boston, Washington, Baltimore, Las Vegas, and Seattle, as well as "some surrounding areas," will now be able to receive shipments on the same day they place an order. The service will be coming to Chicago, Indianapolis, and Phoenix "in the coming months."

Amazon said "thousands of items" are available now to customers living in those cities. The new option, called Local Express Delivery, will have varied pricing that depends on the type of product purchased. Amazon Prime members--customers who pay $79 per year to receive unlimited two-day shipping from the online retailer--will need to pay $5.99 per item for the service.

In order to get an item on the same day it's ordered, customers will need to buy products prior to their city's cutoff time. For example, New York customers will need to order a product by 10 a.m. ET, while Seattle customers can purchase products by 1 p.m. PT. The other cities' cutoff times vary within that range. According to Amazon, it will list the cutoff times on each eligible product's detail page.

Amazon's Local Express Delivery charges. Screenshot by Don Reisinger/CNET

Saturday delivery added to the mix
Amazon also expanded its Saturday Delivery options. Orders placed before a city's cutoff time will be delivered on Saturday when the customer chooses the Two-Day Shipping option. Amazon Prime customers will be able to receive shipments on Saturday for no additional charge. All other customers will need to pay the shipping rates applicable at the time of purchase.

Amazon will also offer customers the opportunity for Saturday delivery on overnight shipping. Once again, orders need to be placed before the site's cutoff time. Non-Prime customers will need to pay $3 on top of standard overnight shipping rates, while Prime members will be charged $6.99 to have items they order on a Friday delivered the next day.

Unlike Local Express Delivery, which is available only in select cities, Amazon's Saturday delivery is now available anywhere. Prior to this announcement, an Amazon representative told me in a phone conversation, Saturday delivery is available to Amazon Prime customers for the same $6.99 rate. Other customers need to wait until Monday.

Amazon's shipping upgrade might not be great for all its customers. In fact, JPMorgan Chase analyst Imran Khan wrote that the company's new Local Express Delivery option might benefit Prime members most.

"Amazon Prime subscribers can get same-day delivery for $6 per item," Khan wrote in a note to clients. "Purchasers who are not Prime subscribers will be charged $15+ per shipment (depending on category), making the service less economical."

That said, Khan did say that it could help Amazon increase order frequency: "When Amazon introduced Prime, it raised the order frequency for Prime shoppers--and we think the new delivery option could be one more lever for increasing order frequency."