Amazon to Begin Sunday Deliveries, with Post Office's Help

November 11 -- Amazon.com Inc. will begin delivering packages on Sundays in the nation's two largest cities later this month with an unlikely partner—the U.S. Postal Service.

The marriage of one of the country's most successful enterprises with one of its most troubled underscores Chief Executive Jeff Bezos's ambitions to weave Amazon more deeply into consumers' lives. The nation's largest Internet retailer has begun same-day grocery delivery in some cities, and is developing smartphones and a set-top box.

Sunday delivery is Amazon's latest effort to chip away at a key advantage for brick-and-mortar retailers: immediacy.

"Delivery on a Sunday would be very compelling for consumers. There are certainly people who decide not to make an order on a Friday because it won't get there until Monday," said Sucharita Mulpuru, a Forrester Research analyst.

But Ms. Mulpuru said Amazon would likely incur relatively higher costs on Sunday because of lower volumes. "This has to be much more expensive than other days," she said.

Amazon and the Postal Service declined to discuss the costs, volume projections or the length of the contract.

Amazon said Sunday delivery will begin on Nov. 17 in Los Angeles and New York and expand next year to Dallas, New Orleans, Houston and Phoenix, among others. Amazon will bring packages from its warehouses to Postal Service locations on Saturday evening or Sunday morning. The agency will then deliver them to doorsteps.

Sunday delivery will be available for all Amazon customers in markets where the program is available at no additional cost. Customers won't specify Sunday delivery; eligible items will show up on Sunday if that is when they are ready.

Representatives of Amazon and the Postal Service said the Seattle-based company was taking advantage of a little-known offering available to any shipper. The Postal Service makes limited Sunday package deliveries for its own needs around the holidays, but the arrangement with Amazon represents its first large foray into Sunday delivery.

The Amazon contract will be a much-needed financial boost to the Postal Service, which continues to bleed red ink as more Americans eschew "snail mail" in favor of email, instant messaging and social networks. The agency, which said it expects to lose around $6 billion this year, has been closing locations and has proposed ceasing Saturday delivery of many items to cut costs.

A Postal Service spokeswoman said the agency wouldn't need to hire additional workers. She said officials have been working for more than a year on a "flexible" workforce that could be asked to clock in on Sundays. "We're ready for Sunday in the current markets," the spokeswoman said. "If this were to expand, we would look at staffing levels and adjust accordingly."

Amazon selected the Postal Service over United Parcel Service Inc., FedEx Corp. and others because its technology pairs well with the government agency's, said a spokeswoman, who declined to discuss specifics. The Postal Service delivers some Amazon packages on other days.

Sunday delivery is Amazon's latest initiative to expand the speed and breadth of its offerings. The company has been building a network of warehouses close to urban centers, from which it has begun offering same-day grocery delivery in Los Angeles and Seattle using its own trucks. Amazon has offered Sunday delivery through the grocery service, where consumers can select from more than 100,000 nongrocery items to be delivered along with their frozen waffles and tomatoes—an offering that will continue after Sunday parcel delivery begins.

In addition, Amazon has created mini-distribution centers in Procter & Gamble Co. plants from which it ships items directly to customers, rather than relaying them through larger warehouses. To reduce failed deliveries, it also is installing lockers in grocery, convenience and drugstore outlets where customers can later pick up their packages.

Dave Clark, Amazon's vice president of world-wide operations, said that later this month Amazon would also begin Sunday delivery in London, using its own trucks.

Adding an additional delivery day could help drive more users to Amazon's $79-a-year Prime unlimited two-day shipping program, said Mr. Clark. Amazon doesn't disclose its Prime membership rolls, though it said this month that those customers buy twice as many goods as customers opting for free shipping. Analysts estimate the company has more than 10 million Prime users.

Greg Bensinger    www.online.wsj.com