INQUISITR.COM / News & Politics

AmazonFresh Prepares To Take The Place Of Local Grocery Stores

By Trisha Faulkner
Published on: 11:21 PST, Apr 10, 2016

It was in June of 2013 that The Inquisitr first reported Amazon’s announcement to expand AmazonFresh to locations other than Seattle. What started out as a fresh grocery delivery service in Seattle, Washington, has expanded to New York, New Jersey, Pennsylvania, Connecticut, California, and Maryland.

According to Investopedia, customers can use an application on any mobile device or the AmazonFresh website to order fresh groceries. The service offers both same day and next day delivery options. For customers who spend more than $50, there is no delivery fee.

Customers get to enjoy an AmazonFresh membership free trial for 90 days. After 90 days, there is an AmazonFresh Prime membership fee of $299 per year. In addition to AmazonFresh, this fee does give customers access to Amazon Prime and all Amazon Prime benefits as well.

Just yesterday, The TechNews warned AmazonFresh would take the place of local grocery stores. This e-commerce giant has been able to open its own library of books, clothing, and electronics. While Amazon still has a lot of work to do to get to a place where AmazonFresh is as accessible to customers as other Amazon features, many believe the day will come where this Amazon features does replace the need to go to local grocery stores.

Bloomberg Gadfly reported that despite the fact that Amazon accounted for 22 percent of food and beverages sold online in 2015, the overall number of customers shopping for groceries online is still relatively small. Americans are expected to spend $795 billion on food and drinks during the year 2016. However, only $33 billion of it is expected to be spent online.

The low numbers and small progression are due to nothing more than the fact that shoppers are going to need a while to feel comfortable purchasing chicken breasts, apples, and granola online. After all, it is just as easy for these shoppers to stop at a local grocery store on their way home from work or school to pick up the food they need. Companies who are exploring the market of fresh grocery delivery are struggling to find a way to profit from picking, packing, and transporting the groceries while still offering prices appealing enough for the customers to place an order. It is easier and more profitable for a company to mail a book or video game to a customer because they do not have to worry about keeping it cold or making sure it doesn’t get bruised.

Dabbling in so many different industries and delivering so many different kinds of products to customers on a weekly and daily basis allows Amazon to have an advantage that companies only selling groceries do not have. A large number of people go grocery shopping on a weekly basis. Some even go grocery shopping on a daily basis. The higher the demand for Amazon delivery trucks (regardless of what they are delivering) the more Amazon can profit.

As the AmazonFresh delivery trucks start rolling out more frequently for deliveries, the company can include other products on the truck to be delivered to customers nearby. Suddenly, the AmazonFresh program becomes more profitable to Amazon because they have another delivery truck on the road that is able to deliver products ordered through other parts of the company as well.

The real key to Amazon being able to benefit by AmazonFresh and expand it to the rest of the United States is getting customers interested and addicted to the idea of having their groceries delivered. Once the customers like the idea of having groceries delivered, they will start to turn to Amazon for their daily or weekly grocery needs.

[Photo by Kevork Djansezian/Getty Images]

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