Why One-Day Shipping Will Be the New Normal, Despite the Expense for Retailers

Once again, Amazon sets the trend

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When Amazon CFO Brian Olsavsky announced during the company’s Q2 earnings call in April that it was shifting to free one-day shipping for Prime members, the world—as it so often does when the ecommerce platform pushes the needle—went nuts. Coincidentally, just six months later, nuts are among the more than 10 million products U.S. Prime members can order with free one-day shipping.

And while it will cost Amazon $4 billion-$5 billion this year alone to add the employees, warehouse shifts, inventory and sorting centers necessary to make 24-hour delivery a reality, Amazon is the one company in a position to do that, said Youssef Squali, managing director and global head of internet and media equity research at investment bank SunTrust Robinson Humphrey.

But

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