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Amazon sees Wal-Mart's bet, raises ante
Score another round in the online delivery wars for Amazon (NASDAQ: AMZN).
The shopping site on Thursday announced that members of its Prime program living in more than a dozen metropolitan areas will no longer have to wait two days to score free shipping on orders for more than a million items. ( Tweet This )
Instead, residents in these 14 regions-including New York, Atlanta and Boston as well as new same-day delivery markets Tampa Bay in Florida and San Diego-will now receive free same-day delivery to members on orders of $35 or more. The service previously cost $5.99.
"Basically what we're announcing just makes it easier yet again for Amazon Prime members," said Greg Greeley, vice president, Amazon Prime.
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Retailers have been upping the ante on delivery deals to gain an edge as more shopping is done online. Earlier this month, Wal-Mart (NYSE: WMT) said it is testing a subscription model that would provide free shipping for an annual fee of $50-about half the price of an Amazon Prime membership. And after offering free shipping on all Web orders during the holidays, Target (NYSE: TGT) in February lowered its free shipping minimum to $25 from $50.
Amazon, which is also up against traditional retailers' ability to quickly fill customers' orders at their stores, has likewise been sweetening the deal for its shoppers. In December, it launched Prime Now, which provides one-hour delivery on everyday household items including paper towels and batteries for $7.99; two-hour delivery is free. The program, which initially kicked off in Manhattan, has since expanded to cities including Miami and Dallas.
Read More Why you're looking at online sales all wrong
Amazon has also increased its investment in fulfillment centers across the U.S., and now has more than 50 locations. On Tuesday, the company said it would hire more than 6,000 full-time workers across its network to "meet growing customer demand."
These changes come as consumers increasingly expect free delivery. A recent study by Walker Sands Communications found that no-cost shipping would be the feature most likely to get people to shop online, followed by free returns and one-day shipping. That study of 1,400 online shoppers also found that nearly 96 percent of respondents had made a purchase from Amazon in the past year.
Read More Amazon adds one-hour delivery in NYC
According to Amazon's fourth-quarter earnings report, the number of members enrolled in the Prime program grew 53 percent last year, though Greeley declined to break out how many same-day orders are placed on Amazon each day.
A recent report by BGC Financial estimates Prime has 46 million members around the world.
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