Does Amazon need bricks to make its online grocery business click?
For all the mystique that surrounds the company, Amazon.com has encountered the same problems with its AmazonFresh service as others who have tried to tackle home delivery of groceries, according to a Bloomberg report. Perhaps the key to success for Amazon is not in bringing groceries to customers, but having them pick up orders placed online. The e-tailing giant is about to test that strategy with the official launch of its AmazonFresh Pickup service at two locations in Seattle.
Amazon bills the new service as a convenient way to order and pick up groceries. The service is currently in beta mode and is available to Amazon employees only. Following its test phase, AmazonFresh Pickup will be offered as an exclusive, free perk to Prime members. Amazon has been reported to have roughly 50 million members in the $99 annual subscription program.
Orders place for pick up can be ready in as little as 15 minutes after being placed, according to Amazon. Customers drive to the AmazonFresh Pickup location and park in designated areas where their orders are brought to their cars. Amazon says Prime members can choose from thousands of grocery products. There is no minimum order.
A recent report by Bloomberg cited a research paper by Vrajesh Modi, an engineering student who now works for Boston Consulting Group, that described problems with the AmazonFresh home delivery business including lack of demand, poorly trained employees, and issues with food quality.
- Introducing AmazonFresh Pickup: Groceries delivered to your trunk – YouTube
- AmazonFresh Pickup
- Amazon struggles selling groceries online; might open brick-and-mortar stores – Bloomberg News/Minneapolis Star Tribune
- Amazon tries to bag a big chunk of grocery market with Seattle pickup locations – The Seattle Times
- How will AmazonFresh Pickup stores affect the grocery business? – RetailWire
- Will Amazon drive-up grocery stores disrupt food retailing? – RetailWire
DISCUSSION QUESTIONS: Do you expect that AmazonFresh Pickup will become the model for Amazon’s grocery business going forward? What do you think of the service being offered for free as an exclusive perk for Prime members?