I greeted the announcement that Prime Now was coming to a neighborhood near me with interest. For those unaware, “Prime Now ” is Amazon.com’s same day delivery experiment. Currently, Prime Now cities are Miami, Dallas, New York (!?), and Baltimore with plans to expand into more metropolitan areas over the course of 2015.

Prime Now has two levels of offerings, all for existing Amazon Prime members: Free two hour delivery and $7.99 for one-hour arrivals in certain zip codes. My zip code is just one digit from the one-hour delivery window, but it turns out that I am in the two hour zone.

It’s important to note that the two-hour zone isn’t exactly as it sounds, and that’s good for Amazon. If I look at the Prime Now app, it tells me the next two hour window of availability for me. So, for example, I was writing this at 11:32 am Sunday morning, and Prime now was telling me that if I order in the next 13 minutes, I could receive my order between 12 and 2 PM. That’s better than a lot of furniture and cable companies I know of! It’s not unimpressive. Since I was going to be home on Friday night, I placed my order at about 7:15 that evening, with a promise to have it delivered between 8 and 10 PM. The order arrived at my house at 8:13 PM. That’s pretty darned good!

Of course, I had no idea what was included in the “over 25,000 products available ” and had no real pressing need in any case, so I downloaded the app onto my iPad and started browsing. Products are available in one of five generic categories: Healthy Living, Beach Day (don’t hate me: it’s Miami!), Spring Cleaning, Pet Central, Gift Ideas and Everyday Essentials.

Right out of the chute, I’m going to say the assortment is a little weird. Every category, excluding Pet Central, leads with the Fitbit Flex. I’m not clear why this is something people need within one hour, but I assume there’s a reason for it. I expect that as the project moves forward, more items will be added to the assortment and others will be displaced. In any case, I ordered a pretty random selection of products: a case of paper towels, some food storage bags, 2 liters of coconut water and a toy called a “cat dancer ” which was once a favorite of my cats back in the day.

Now I’ll get to the core of why I think Amazon is going to do this well, and why they’re going to make money on it too.

The first thing you notice when you place the order is that Amazon expects you to tip the driver. In my case (for a total order value of $53.18), it recommended a $5 tip be included with the order. I accepted that. So the onus of delivery costs are not solely siting with Amazon. UPS drivers are not dependent on tips.

The driver is not allowed to just place the order by the door. The recipient must be home to receive it. That forces an interaction, and in my case, the interaction was really pleasant. When the driver arrived, I started asking him some questions. He is an Amazon.com employee…not a contractor. He’s very happy with his new job and it keeps him busy.

He told me Amazon’s distribution center is in Doral. For those not familiar with the Miami area, Doral is pretty close to the airport, in an area that has more open space and lower occupancy costs. The area has an interesting mix of businesses from warehouses to the headquarters of the Miami Herald, to country clubs (the newly renamed Trump National Doral, Miami among others). That’s actually a prime (ugh!) location for a distribution facility – very centrally located. Even though Miami’s traffic is awful and getting worse all the time, it’s almost impossible to stretch a trip from Doral to midtown Miami (in the 1 hour delivery zone) to an hour. On a good day, the airport is 18 minutes from my house and on a really bad one 35 minutes. Plus, if traffic is really bad, back roads are available for those who know their way around.

That means the driver is not going to disappoint customers very often.

But the kicker was in the packaging. Frequent readers will recall that I have asked over and over again how Amazon can possibly ever make a profit while shipping so much air inside so very much corrugated. But the Prime Now order didn’t have that problem. The case of paper towels were properly boxed in its own carton, but everything else was placed just like you’d get it in a grocery store – in a heavy duty brown paper bag, stapled closed with a packing list on the outside. I guarantee the cost to deliver that order was less than half a typical Prime order. And the delivery guy got a motivating spiff as well.

Do I think that Amazon is threatening the core of terrestrial retailers’ business with the current Prime Now offering? I can’t say I do. But thinking about what Dollar stores did to Walmart – nipping around the edges of its market basket just enough to keep comparable store sales flat – I could easily see Prime Now doing the same to Pet food chains, grocery stores, and even Costco. I do see this as a potential disruptor, especially if (when?) they get the assortment right. And I really believe these orders will be more profitable than “regular ” Prime orders. It’ll show up nicely on Amazon’s P&L.

Now there is one niggle here. I downloaded the app onto my iPad and built the order on the iPad as well. Even though it’s clearly an app primarily made for the phone, I didn’t foresee any problems. I was wrong. I could see all the products, and place them in my cart, but when I got to the point of checkout, I could not finish. The app kept asking me again to select a shipping address. No matter how many times I did so, it still went back into that loop.

To finish the order, I downloaded the app onto my phone, signed in, saw the contents of my cart intact, and finished checking out. Luckily I have multiple iOS devices, but either I should have been warned to download at my own risk, or not be able to download the app at all.

This surprised me. After all, some people believe Amazon is more a tech company than a retailer anyway. This bug should have been found WAY earlier than it has been. As of this writing, no update has been made available. That’s four cities with a buggy app. I am sure there will be a tablet app coming soon, but still: it just bugs the ex-CIO in me.

Bottom line: Retailers do need to be concerned. Home delivery in narrower windows is a service that consumers want. In fact, I could say, we’re desperate for it. Suddenly, Amazon has made it possible, and without a week of planning in advance. The gauntlet has been thrown down.