Amazon wants to grow its same-day fulfillment network more than tenfold, to over 1,000 buildings by 2031 from roughly 85 now, under a plan codenamed Project Mercury, according to internal planning documents reviewed by Business Insider. The multi-billion dollar effort would put Amazon closer to Walmart in terms of geographic footprint, since Walmart fulfills from over 5,000 stores and clubs.
Amazon currently positions its same-day facilities about 90 minutes away from customers, but the new plan aims to put warehouses within a 10-mile straight-line radius of 80% of Prime members in the US, according to the documents. It hopes to accelerate expansion through Orbital, a smaller warehouse format that takes up only 100,000 sq.ft. and is expected to process about 75k same-day and perishable units per day.
The moves make perfect sense for Amazon: Smaller facilities are cheaper and easier to build, especially compared to Amazon’s large-format facilities that can range from 600k to over 1M sq.ft., and the facilities can be positioned closer to city and town centers. Being closer to dense population areas means shorter drive time and more deliveries during the same window of time, which also conveniently means squeezing more productivity out of drivers.
As for sellers: The changes will make supplying inventory more difficult and costly, as they’ll need to spread units across exponentially more locations to reach a hyper-local customer base. Not that Amazon cares about that. “Sounds like a you problem,” an Amazon executive likely thought during the planning stages.
At the end of the day, it’s where the industry is headed, and it’ll better serve customers, especially for groceries and everyday essentials. Each smaller fulfillment location will carry fewer SKUs, but do you really need over 40,000 results when searching for a “USB-C charger” when a few dozen options would do the trick?
An Amazon spokesperson of course told Business Insider that internal projections are “preliminary, subject to significant revision, and shouldn’t be treated as finalized plans” — because they never admit to anything. The spokesperson added, “That said, it’s no secret that we’re focused on delivering faster for customers and the expansion of our same-day delivery network is playing a big role in that.” So in other words, “yes.”
