There’s a new contender in the online grocery shopping business. A new hat on a familiar face Amazon, the world’s largest online retailer. Jeff Bezos started out selling books in 1995 from his garage. The company quickly took off and broke into other markets like electronics, clothing, appliances, music, and more.
And now, Amazon wants to sell you groceries.
Sending Produce up the River
Back in 2007, Amazon opened its digital doors to a new business in its home city of Seattle, Washington. The company called this new portion of its online business AmazonFresh, and offered subscribers the chance to order grocery and food items online. The goods would then be delivered right to their door.
The service has been pretty successful in Seattle. Especially since AmazonFresh subscribers can also order from a selection of 500,000 “everyday essentials” with their grocery order. These items range from cleaning products and toiletry items to electronics like digital cameras.
Another feature that has aided in the success of AmazonFresh in Seattle is the AmazonFresh mobile app. Customers can keep grocery lists and make orders right from their Android or iOS smartphones. The app also includes the ability to browse products for sale, a search tool, bar-code scanner, recipes, and a list of “expert picks.”
Expanding to new Markets…
Earlier this June, AmazonFresh made its services available to customers in Los Angeles. The service will operate the same in both cities; customers are required to pay an annual subscription of $299. AmazonFresh fresh has a minimum order of $50, and a delivery fee of $7.99 per order.
The same perks are available: orders placed before 10am are delivered that day, and all other orders are guaranteed by 6am the next morning.
Experts agree that the demographic for a service like AmazonFresh includes busy working women in cities, especially mothers, and 20-somethings who live in urban settings, don’t drive, and are familiar and comfortable with e-commerce.
Amazon isn’t satisfied with its current expansion. The company has already announced plans to expand to San Francisco. Rumors suggest that AmazonFresh will be available in 20+ cities by 2014.
We Aren’t Scared!
Since Amazon went public in October of 1995, it has been the quintessential big online business. It has succeeded in the online retail business the way experts expected online grocery stores to take off after the first dot com boom.
However, only small niche online grocery services survived hard times. Small online grocery delivery services exist today in Los Angeles, and they say the arrival of AmazonFresh in their city doesn’t bother them.
A small online grocery service in LA called Yummy can fill orders in about 30 minutes for a small fee. The company says this gives them an edge of AmazonFresh. To them, Amazon’s big business approach to delivery will be to AmazonFresh’s detriment.
The small business uses four supermarket locations in the city to keep costs low.Yummy’s delivery charge is only $3.99 per order, compared to AmazonFresh’s $7.99 per order.
What is Amazon’s end Goal?
In an area where so many have crashed and burned before, does Amazon really feel it can succeed with its online grocery service?
An expert was recently interviewed by NPR on the subject. He says the picture might be bigger than we originally thought. Adjust your focus, says Justin Bomberowitz, “What this does is give Amazon the opportunity to connect with customers on a more frequent basis.”
Remember, customers can order those “everyday essentials,” nonfood items one would normally order on Amazon.com, along with their grocery order.
According to Bomberowitz, who is a senior analyst at RetailNet Group, Amazon doesn’t even plan to make money with AmazonFresh, at least not at first. According to NPR, Amazon’s “goals is really to break even with grocery delivery while also using the service to grow Amazon’s same-day-delivery service.
What’s you view about AmazonFresh? Share with us in the comments section below.
This is a guest post by Lewis Jacobs, an avid blogger and tech enthusiast. He enjoys fixing computers and writing about internet trends. Currently he is writing about an internet in my area campaign for local internet providers.