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Fortune reports this morning that Amazon "is waving fees for Prime members using its same-day delivery and expanding the markets where the service is available, its latest volley in the e-commerce wars," describing it as "the latest volley by a retailer looking to one-up rivals with ever-faster and ever-cheaper service."

The story notes that Amazon is adding San Diego and Tampa Bay to the list of markets - including New York, Los Angeles, Chicago, Dallas, San Francisco, and Philadelphia - offering same-day delivery. Shoppers there can "place an order of at least $35 from an assortment of 1 million different items, as late as noon in most of those cities, and get it that day by 9 p.m. for free, eliminating the $5.99 fee members previously paid. The $9.98 basic fee and 99-cent-per-item charge for non-Prime members will remain. (Prime members pay $99 a year and get free unlimited two-day shipping.)"

The move is designed to keep Amazon ahead of retailers such as Macy's and Nordstrom that are offering same-day delivery for a fee, as well as Google, which has an option allowing third-party retailers to order from Target, Costco and Walgreen via Google's Express service and get products delivered the same day. And, of course, there's Walmart, which is spending billions on ramping up its tech capabilities and catch up with Amazon on the e-commerce front.
KC's View:
Investors probably won't be happy, because this is going to represent an expenditure without a short-term return. But once again, this is about Amazon creating an ecosystem that captures, nurtures and retains consumers, giving them little or no reason to go elsewhere for anything, ever.