Amazon continues to ratchet up the grocery home delivery arms race and while I’m sure this will be very attractive for some Prime members, I’m not sure it will have a significant impact on Prime memberships. As far as competition is concerned, other than the largest, everyone else is being left in the dust. Of course Walmart and Target will respond in some way, and other retailers will watch in wonder – how can this possibly be sustainable? It’s not.

This undoubtedly will drive more business, but not significantly.

I look at it as another chink in the armor Amazon has wrapped around the myth that when they paired with Whole Foods, they would be unstoppable. Whole Foods is such a mess in so many ways, especially its SKU for SKU excessive pricing, that this is just a Band-Aid.

Finally, the battle for Walmart’s $265 billion grocery business begins. I don’t think this is the end-all in terms of getting more market share, but it is DEFinitely the first shot over Bentonville’s bow.

I don’t think the reason people aren’t shopping for groceries online is shipping costs. Many want the choice of picking out fresh food themselves – which is also free.

This could be the catalyst that inspires many consumers to try grocery delivery. In the U.S., online grocery ordering for delivery has not seen the adoption rates experienced in other countries.

Free grocery delivery is not a profitable model so I don’t expect a lot of retailers will match this offer, at least not right away. Let’s see how long it lasts for Amazon first.

The interest and subscriptions of new Prime members will definitely go up. Zero cost for grocery delivery is, of course, very attractive to consumers. It will just be a matter of time until grocery giants like Walmart will (need to) follow. This is bad news for individual stores or smaller grocery chains, as they will hardly be able to offer the same service at no extra cost.

This will help Amazon play catch-up, but it won’t propel Amazon into the grocery big league. First, most grocery purchasing still takes place in stores: and Amazon has not done anywhere near enough to make Whole Foods a significant player in that arena. Second, a lot of online grocery shoppers like services such as curbside collection, which Amazon cannot offer to the same extent as bigger players with more stores. Third, in brand terms a lot of consumers still don’t think of Amazon as a place to get groceries – and that needs to change before Amazon can get major traction.

This is yet another gut punch for Amazon’s competitors. Another forehead slapping, “ya gotta be kidding me” moment. I continue to marvel at Amazon’s ability to internally subsidize market share grabs. So Amazon keeps winning the convenience war. And unless competitors can counter with better content, sales will migrate to Amazon. My favorite fresh baked sourdough has me captive to my shopping routine. Now where are my car keys?

It will if Amazon can make more money on Prime membership than it loses on free delivery, and I am not sure they can.

Not sure about this one since Amazon and groceries is not as tight of a branding connection for consumers as Walmart and groceries. Then there are the supermarkets. Whole Foods is too segmented in its appeal (I’m in the “wouldn’t go where I don’t find my favorite brands” segment). I think the right play would have been to acquire a mainstream supermarket, if grocery is the right play at all (such thin margins…)

Amazon’s ability to offer unrealistic benefits and make them consumer expectations continues, supported by other services. I don’t see free delivery having a significant impact on growth for Amazon. Anyone who hasn’t tried the service is likely put off by more than the price of delivery. The fact is that Amazon is very good at logistics, but dismal at grocery. Whole Foods is hardly the juggernaut it was expected to be, and selling food is – and always will be – different from selling electronics or books.

Some additional Prime members will start using the free food delivery. However, food delivery will not address the requirement of many shoppers who want to view the food before it is purchased, especially in meats and produce. This service will be used by some new shoppers but will not be used by the majority of customers.

It makes more sense for Walmart to offer this service from its over 4,000 stores than Whole Foods in its much smaller footprint with its much higher price points.

Offering free grocery delivery to Prime members is all about lifetime value. Get members into the fold and you increase market share. Once a shopper is pleased with the service social media will advertise it on its own.

Increasing market share versus increasing profitability is the motivation behind this new promotion. It is irrelevant that the bottom line or the stock price drops, the important factor is becoming number one in the marketplace.

Amazon’s avenue to success lies in their scale. Membership fees and advertising are their foundation for profit, not the sale of cereal.

A few curious Prime members will try out free grocery delivery. Big grocery players like Walmart will try to respond by also offering free grocery delivery. The problem is, consumer demand for online grocery shopping isn’t quite there yet. People still like picking out their produce and the social interaction that comes with regular grocery shopping – for now. A few years from now, online grocery will likely gain traction. Amazon is starting another race to the bottom. They have the cashflow and willpower to lose money on grocery delivery (which is very expensive and logistically challenging) so that when consumers are ready to buy groceries online, Amazon will already be dominating the market.

Not gonna lie. I have my first order coming in about 6 hours. BUT — if they come with ungodly amounts of packaging like they did before (Whole Foods post-Instacart), it will be my only order from them.

I am hoping they will make use of their shiny new vans to climate control the orders and not have to pack things in stacks of dry ice. If they can do that, it’s a winner. If not, people will continue to turn up their noses at the sheer wastefulness of it, and just buy via Instacart.

This is a real game changer — but attached to a huge cost. This will only work if Amazon can sustain the losses for an extended period of time. Its biggest challenge will be adoption rate by Prime members and unless this is hockey stick style, it will be forced to reevaluate grocery aspirations. They won’t have the option of increasing pricing on Prime without a potential backlash. Due to demographics, mostly this change will affect the affluent grocery market, so expect some internal cannibalization of Whole Foods with lower foot traffic. Rivals, especially serving less affluent markets, may even see a bump in shopping. In shopper terms, the convenience will be great if promises are kept and Amazon can deliver within the timeframes. If Amazon halts or charges for the service again in the future, they will lose the grocery race (at least this round). Landry is definitely taking a bold step, but if they’re willing to eat the losses for as long as it takes and there is rapid, broad adoption – they… Read more »

Convenience just became less expensive. At least it appears that it is. So let’s be clear about this. It’s not really FREE. It’s just that there isn’t an extra charge. The cost of the two-hour delivery is baked into the price of the grocery items. For this to work, Whole Foods and Amazon Fresh will have to be competitive. Not necessarily offering the lowest price, but they need to stay away from the “Whole Paycheck” reputation that Whole Foods has been known for.

Still, grocery shopping is a ritual. Consumers like to touch and feel the produce they are buying. They like to pick out the fish and meats they plan to eat later that night. It will be a while before grocery delivery hits critical mass. Even thought it’s been around for a while, we still have a long way to go.

Amazon may get an initial incremental bump in grocery sales, but then the ability to sustain the business will be dependent on high quality fresh (every time, all the time) and the right variety of center store items. Regardless of any sales gains for Amazon, they along with Target, Best Buy, etc. can’t absorb the cost of free shipping over the long-term. At some point they all will return to charging for shipping, create an incremental fee or raise the cost of goods. I agree with other comments, the grocery wars across the omni-channel are finally beginning.