|Mon June 10 2013 12:27:08|
Amazon Launches New Prime Service for Groceries
By: Ina Steiner
Amazon expanded its grocery store and delivery service called AmazonFresh to the Los Angeles area and is charging a $299 annual fee for use of the service. The program requires a "Prime Fresh" membership, which is an upgrade of the company's regular Amazon Prime program.
The company's regular Prime program, which costs $79/year, provides free two-day shipping for purchases on Amazon.com as well as free access to Amazon Instant Video and the ability to borrow books from the Kindle Owners' Lending Library.
What do you get for the extra $220 of the Prime Fresh membership (which works out to be $18.33 extra a month), and which appears to be available only in LA and not in Seattle?
- Free Same-Day & Early Morning Delivery: Free delivery on orders over $35. Place your order by 10am and have it by dinner (6 pm), or by 10pm and have it by breakfast (6 am).
- Huge Selection, From Milk to Electronics: More than 500,000 everyday essentials, delivered at the time slot of your choice. What's on your list? Whether it's apples, shampoo, or a digital camera, we've got what you need to keep your household running smoothly.
- Local Shops & Restaurants: We bring your city to your doorstep - from bakery to ethnic foods to gourmet meals. Order up fresh mahi-mahi from Santa Monica Seafood, a tasty rhubarb cream pie from The Pie Hole, or a crisp salad from Mediterranean City Grill.
- Time-Saving Tools: Shop anytime, anywhere from our site or mobile apps. Save your lists, see your past purchases, and find one-click recipes, and get your shopping done in minutes.
There are two types of delivery services: "With Doorstep Delivery, your orders will be placed at your home in sealed, temperature-controlled tote bags. With Attended Delivery, tote bags are delivered in person to someone that must be home to receive them. Attended Delivery is required for sensitive purchases such as alcohol."
Google is rumored to be launching a service that competes with Amazon Prime, and companies from eBay to the USPS are testing same-day delivery service, with California - and the Bay Area in particular - a popular testing ground. But those services charge by delivery, not by offering a fixed membership plan.
There's lots of skepticism in the industry about whether Amazon is even breaking even with its current Prime membership program - but it's pretty certain it drives incremental orders, since members are motivated to buy from Amazon to get free shipping if they've already paid for Prime membership. The same could be true of Prime Fresh - lock people in to using your service.
It would be interesting to know if restaurants are subsidizing delivery costs, or if Amazon is counting on customers ordering Amazon.com items at the same time they order dinner.
How will such services impact the local economy, from restaurants, to their delivery staff, to grocery stores, which certainly have something to fear if they go head-to-head against Amazon?
Would you pay $25/month (or $18/month extra if you already use Amazon Prime) in order to get same-day delivery from Amazon and its local retail partners? Right now, you don't have the option unless you live in LA, but is that something you would sign up for if it became available to you?