Warehouses are more commonly found in suburban or rural areas because they can be so massive and they attract an overabundance of giant trucks. However, Amazon has another idea. Focusing more on delivering orders within hours instead of days, Amazon has put a warehouse in the middle of downtown New York City right across the street from the Empire State Building.
The items stocked there are destined to go to members of Amazon Prime Now. For a fee of $99.00 a year members can order items that are delivered in just hours.
The warehouse occupies the fifth floor of an office building and measures about 50,000 square-feet. Included with the shelves that hold products there are refrigerators and freezers that keep perishable items like food cool and fresh waiting to be ordered, scooped up and then delivered.
One of the main purposes of Amazon Prime Now is to entice consumers to become members so they can get groceries, drug store items, and more delivered to them instantly so they can forego a trip to the grocery or drug store.
The concept of Amazon Prime Now, which was introduced about a year ago, is making other online and brick-and-mortar retailers like Target and Wal-Mart to concentrate more on delivery time. The concept has spoiled a large amount of consumers into believing that they should expect things they order to be delivered in just a few hours. So the other retailers are struggling to keep up.
New companies like Instacart, Uber, Deliv and Postmates are getting involved to quickly deliver lunch, groceries or items like paper towels.
Besides warehouses smack in the middle of a city, Amazon recently purchased thousands of truck trailers in order to move more products around quicker. Moreover, there are reports that it will be leasing air cargo jets to sustain their drive to deliver goods ultra-fast. Of course, we’ve also heard about Amazon developing drones that could some day be used to deliver packages. Google and Wal-Mart are reported to be considering the use of their own drones as well.
Instead of a fleet of forklifts, the new Amazon warehouse on the fifth floor of a New York City office building relies on dozens of workers who scurry about tight aisles filled with consumer goods. They pick their orders and put them into brown bags on top of their rolling carts. Individual couriers then deliver the bags to customers.
Many warehouse managers would be surprised to hear that the shelves are randomly stocked by design to eliminate traffic jams of workers congregating in small areas.
The Manhattan warehouse is the first of the concept and was opened in December 2014. During the year the company has opened a dozen more of these centers.
The challenge that Amazon now must confront is to shrink down their stock, which is commonly stored in one-million-square feet distribution centers, to fit into much smaller locations.
So far, Amazon has done this by knowing its customers. It has created a different assortment of product inventory based on the local tastes. For example, the company stocks more organic foods in its urban warehouse in San Francisco and more Seahawks gear appear at the urban warehouse serving Seattle. Some popular items coming from Amazon urban warehouses by region include Haribo gummy bears in Houston, Ben and Jerry’s ice cream in Las Vegas and organic baby carrots in Portland, Oregon.
Amazon is delivering orders from their Amazon Prime Now members in just two hours in 23 cities. The members also get unlimited two-day deliveries of a larger selection of products and also receive a number of perks. One-hour deliveries are only be done in particular zip codes now and cost $8. The Service is also available in segments of the United Kingdom, Italy and Japan. Amazon plans to grow Prime Now internationally during the coming year.
