Rachel Murray / Getty Images
Amazon has already infiltrated the grocery business with its Fresh delivery program, and the company now has its sights set on physical stores. A report from The Wall Street Journal claims Amazon is planning to open grocery stores where people can buy items like produce, milk, meat, and more perishable items. Some of those locations are also rumored to have curbside pickup programs where employees will deliver orders directly to consumers’ cars.
According to the report, these stores will primarily sell perishable items, letting customers pick their own produce—or at least allowing employees to pick things fresh for orders. There are also plans to let customers order other grocery items, like peanut butter and cereal, from a mobile app or devices in the store, for same-day delivery. The project, known internally as Project Como, will first be available to current Amazon Fresh members. Amazon Fresh used to cost $299 per year, but the company recently lowered the price to a $15 per month fee that Prime members can pay in addition to their annual $99 membership fee if they want to take advantage of the grocery delivery program.
If and when Project Como gets off the ground, Amazon would be directly competing with numerous grocery chains across the country, not to mention brick-and-mortar behemoth Walmart, which has expanded its curbside pickup efforts recently. Walmart plans to bring that service to a quarter of its stores nationwide by the end of 2017. Amazon would also be competing with startups that specialize in grocery delivery like FreshDirect, Instacart, and Delivery.com.
This news comes on the heels of Amazon reportedly trying to amp up its shipping and delivery network, to potentially compete with FedEx and UPS. The two services will be undoubtably linked: Amazon already has to deliver Fresh orders, and it would need an even greater delivery network if it hopes to deliver groceries from brick-and-mortar stores to local customers.
But as crucial as groceries are to every household in the country, it’s a costly industry for providers. According to The Wall Street Journal report, Americans spend about $107 per week on groceries. That amounts of about $5,500 per year, which is much more than roughly $2,500 Amazon Prime members spend per year using the service. This could mean big bucks for Amazon if it can compete with established grocers and get Prime members to convert, but it would take a solid network of stores and a reliable delivery system to do so. Unlike regular packages, groceries have to be delivered in a narrow window of time, customers typically have to be home to accept the delivery, and the issue of keeping food cold is crucial.
Amazon is close to opening its first drive-in grocery store in Seattle. But like many of Amazon’s recent big projects, it could take years before we see Amazon grocery stores around the country.
from Ars Technica http://ift.tt/2dLNJQN
via IFTTT