Amazon ups the ante in retail delivery wars

Amazon is upping the ante in the retail delivery wars.

The online retail giant is now offering Prime members free same-day delivery in 14 cities across the country, including New York, Philadelphia, Boston and others.  Orders of $35 or more placed before noon will be delivered by 9 p.m. that day.   

Yahoo Finance Senior Columnist Michael Santoli is not surprised by the new perk Amazon is adding to its Prime service.

“They want to stay one step ahead to make the Prime offering just that much better than what the alternatives are,” Santoli notes. If you wanted to knit together all the things that Amazon Prime gives you from the streaming video to the delivery benefits and all the rest, it's really hard to do for what Amazon's charging.”

Orders under $35 will cost just $5.99 per order for Prime members, and start at $9.98 for non-members.  More than 1 million items will be available for free, same-day shipments -- that compares to the 20 million available for two-day deliveries.

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Earlier this month, Walmart (WMT) announced it will test out a $50-a-year three-day unlimited shipping service this summer. Target (TGT) lowered its free shipping minimum to $25 from $50 in February.

Santoli points that this is just a proactive response by Amazon to stay that much farther ahead of the brick-and-mortar retailers.

“The big department stores and other brick-and-mortar stores have tried to become bigger e-commerce players because they say, 'Hey we have stores in all these markets. Why don't we try to figure out a way to deliver stuff for a fee same day?' and they're trying to do that but Amazon is already there,” he says. “So I do think it's a response to competition but it's more about beating back potential new competition to Amazon than really trying to catch up to anybody else.”

The company doesn’t release numbers for how many Prime members have actually signed up for the service, but according to Amazon’s fourth quarter results the number of members enrolled grew 53% last year.

On Tuesday, Amazon announced it was hiring 6,000 full-time workers for its more than 50 distribution centers across the U.S. to meet growing customer demand.

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