Is The World Ready for Online Groceries?
One of the most menial chores for anyone has to be grocery shopping. Deciding where to shop, what products to buy, and what sales and coupons to take advantage of is time consuming and a huge hassle, especially for time-strapped consumers trying to juggle a family, career, and a decent home life. But imagine if shopping was as simple as taking your list to the computer, selecting your items from a screen, and then having your online groceries delivered.
You could still look for sales, use coupons, and enjoy all the brands you love. Would you do it? Amazon.com thinks you will too. And it’s testing out a new subscription-based online groceries service to prove it.
Amazon Fresh: Online Groceries
Amazon Fresh is Amazon.com’s newest online venture. Not content to be the world’s No. 1 online retailer and a dominating force in the video streaming game, Amazon has been looking at taking over your refrigerator with this new service. Amazon Fresh is only currently available in Los Angeles and Seattle, but the online giant expects to expand the list of cities to 20 by the end of 2014, according to TechCrunch.
However, opting into Amazon’s online grocery service isn’t as easy as ordering a DVD. Users will need to pay an annual $299 subscription fee to use the service, which comes bundled with an Amazon Prime membership. That’s a pretty steep price for convenience, especially as it doesn’t come with any pre-stated rewards or bonuses (like paid grocery loyalty cards). But Amazon seems to be targeting higher-end consumers with the service, not bargain hunters. According to Time, potential Amazon Fresh users would justify the price point by using the service as much as possible to “get their money’s worth,” which would be a double profit win for Amazon.
Are Online Groceries Something People Really Want?
Though Amazon seems confident that their online grocery service will be a hit, other companies who have tried this idea have been less successful in their efforts. Wal-Mart has been testing online grocery delivery, and after extensive testing in California, decided that there isn’t much of a market for online groceries at this time.
Several other companies have tried — and failed — to get online groceries off the ground. Both price and lack of demand have been cited as barriers to success in this area. There’s also the issue of personal preferences, especially when it comes to produce. Picking just the right apple or head of lettuce is an important part of grocery shopping to many consumers, and having some corporation take over that part of a daily routine might be uncomfortable.
Could Amazon Fresh Be Different?
Despite these recent market failures, Amazon may indeed have a few advantages over other companies who have tried the online grocery route before.
One of these is brand recognition and use. Amazon is one of the most recognizable brands in the world, and has made a name for itself, not only as an online retailer, but also as a content delivery system. Whether its delivering books through its Kindle e-book distribution system, or allowing users to stream thousands of movies and TV shows with Amazon Prime, it is undeniable that Amazon has a reputation not only for selling things, but also delivering things.
Could this reputation extend into groceries? That’s the question that Amazon is attempting to answer with its Fresh beta test. Another advantage Amazon has is their single-day shipping option. No one wants to buy groceries and then wait around for two or more days waiting for them to be delivered. Fortunately, Amazon rolled out single-day shipping in several markets a few years ago, and for the most part, this effort has been successful. If Amazon can use its already-established single-day shipping channels to get groceries to consumers, it can maximize its own profits and ensure that groceries are delivered to customers in a timely fashion.
All companies are confident in new product offerings, but if any well-established brand has a chance to really propel online groceries from dream to reality, it seems Amazon is best poised for success.
Will Online Grocery Shopping Come to My Neighborhood Soon?
The answer to this question isn’t easy. If Amazon Fresh does indeed succeed the way Amazon believes it will, you can bet the service will expand to other urban and suburban areas. However, if you live in a more rural area, Amazon Fresh may never come to your neighborhood. Why? Just like one-day shipping, which relies on customer proximity to warehouses, Amazon cannot invest the time and manpower to bring online groceries to places that are too far away from its warehouses.
Featured Photo Credit: BuxMama
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