Will grocers turn to Amazon as an alternative to Instacart?
Amazon.com has plans to share its logistical power with U.S. grocers by way of a local delivery service similar to that offered by Instacart. Amazon will roll out the program across Europe and America next year, according to The Information.
The program known as Amazon Fresh Marketplace was launched in the UK over the past year with the Morrisons and Co-op chains making use of the service. Prime members can use their mobile apps or visit amazon.co.uk to place orders that are delivered the same day by Amazon Flex drivers.
Amazon has not confirmed plans to roll out its service in the U.S. but a spokesperson, Jessica Canfield, told The Information that “partnerships with other grocers enable more customers to shop online and allow us to provide Amazon Prime members with more choice, value and convenience.”
The online grocery market has grown substantially during the pandemic. Nearly 69 million households in the U.S. placed online grocery orders in November, according to a Brick Meets Click/Mercatus Grocery Shopping Survey. That represents a 15 percent increase over last year. In-store and curbside pickup was up 29 percent year-over-year for the month and home delivery improved six percent.
Amazon will face a formidable challenge going up against Instacart, which has partnered with grocery store operators across North America to offer delivery to more than 85 percent of households in the U.S. and 90 percent in Canada.
Instacart in 2020 has sought to build on its advantage, including moves to partner with grocers to build micro-fulfillment warehouses.
The firm has also announced several ultrafast delivery deals with major supermarket chains, including Kroger and Publix that promise deliveries in as little as 30 minutes. Customers of the chains pay a $2.99 delivery fee on orders of $10 or more. Instacart members do not pay a delivery fee. Orders can be placed either through the chain’s apps or websites or through Instacart.
- Amazon Ramps Up Plans for Instacart-Like Service in U.S., Europe – The Information
- Amazon to launch an Instacart-like service in the US next year, report says – CNET
- Co-op is now on Amazon.co.uk! Same-day grocery delivery included with Prime – Amazon.com
- Morrisons is now on Amazon.co.uk – same-day grocery delivery FREE with Prime – Amazon.com
- Shoppers Increase Frequency of Grocery Pickup – Progressive Grocer
- Should grocers welcome Instacart’s warehouses? – RetailWire
- How disruptive is the rapid delivery model to grocery? – RetailWire
- Will the Kroger/Instacart deal redefine grocery shopping convenience in America? – RetailWire
- Instacart and Publix Announce “Publix Quick Picks” Virtual Convenience Store, Now Available to Customers Across the Southeast – Instacart
DISCUSSION QUESTIONS: Will Amazon make significant inroads in the U.S. market should it offer an alternative service to Instacart? If successful, do you expect Amazon to pull back on its own grocery business expansion plans?