Amazon is changing from a discounter to a total convenience service. Survey after survey shows they no longer have the lowest price in the market. So they've decided their future isn't about price competition; it's about getting customers what they want very quickly.

I am a member of Amazon Prime, but involuntarily so. A 12-month membership came with a new offer for Internet service that I signed up for. But I have not used the Prime membership yet because I haven't found Amazon to be cheaper than other places!

Amazon now promises 2-hour doorstep delivery

Amazon is all about getting people to join Prime and then giving them such a compelling series of offers that they stay in the fold. Well, here's the latest one. Amazon Prime's promise of free 2-day is morphing into 2-hour delivery!

Amazon is opening up warehouses located near major cities and mid-market ones too to accomplish this 120-minute feat. They've just added Baltimore and are about to add Miami.

Not every item they sell will be available for the 2-hour delivery to Prime members. What they're doing is taking the 25,000 items they sell most frequently and placing them strategically in these warehouses so they can be at your doorstep in 2 hours.

If 2 hours isn't quick enough, you'll also have the option to pay around $8 to have an item delivered in 60 minutes. But I can't imagine 2 hours not being fast enough!

This new initiative gives Amazon an enormous competitive advantage. It should position them as a direct and existential threat to the overpriced drug store chains like CVS, Rite-Aid and Walgreens that sell so many convenience items at such high markups.

I'm expecting this 2-hour initiative will probably be ramped up to more cities across the country by this Christmas.

Starbucks gets into the delivery game too

Meanwhile, in a similar vein, Starbucks is testing delivery of hot coffee in Seattle and NYC, according to The Wall Street Journal. They're seeing if they can make it work to increase the number of purchases.

When you think about, there is precedent for this. Consider the Chinese food business model, where it's always been about delivery, even though you can eat in the store if you wish. Now it looks like Starbucks is moving that way too!

Image of Clark Howard About the author: Clark Howard

Clark Howard is a consumer expert whose goal is to help you keep more of the money you make. His national radio show and website show you ways to put more money in your pocket, with advice you can trust. View More Articles

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