NEW YORK (CNN) After years of changing tactics, Amazon is finally finding success with its grocery business as it is introducing same-day delivery of fresh food to over 1,000 cities.
Customers may now order perishable food items, such as dairy, meat, and seafood, along with their regular Amazon orders and have them delivered the same day, in what Amazon described in a news release as one of its most important grocery expansions.
Several grocery choices have been introduced and withdrawn by Amazon, with varying degrees of success. To distribute goods to consumers, it has teamed up with neighborhood supermarkets, including its own brands like Whole Foods Market and Amazon Fresh. However, those products led consumers to other online retailers with distinct checkout processes and delivery costs, which occasionally confused them.
Customers will now be able to check out fresh food and other things from the same cart in the regions where Amazon is offering the service. In most areas, Prime members can get free same-day delivery on orders over $25. If the order is less than $25, there is a $2.99 cost. There is no purchase minimum and those without a Prime membership can utilize the service for $12.99.
By the end of the year, availability will be extended to 2,300 cities, with more locations to follow in 2026.
Phoenix, Arizona, hosted the service’s trial last year, while Orlando, Florida, and Kansas City, Missouri, hosted it this year. Customers liked the convenience, according to Amazon, and many of them were first-time grocery shoppers who came back twice as frequently as those who didn’t buy perishable food products.
According to Neil Saunders, managing director and retail researcher at GlobalData Retail, Wednesday’s expansion will most likely increase Amazon’s market share in the food industry.
He told CNN that Amazon should be able to expand successfully because it already has a lot of the logistical infrastructure in place, something that other online grocers have found difficult to do.
According to the firm, the service enhances its current grocery delivery options, which include Whole Foods Market and Amazon Fresh, which both offer quicker deliveries but have higher minimum payments.
Andy Jassy, the CEO of Amazon, has expressed his extreme optimism in the company’s grocery division, which has undergone several changes since Whole Foods was acquired in 2017. Both Amazon’s attempts to run a separate grocery delivery service and its attempts to develop physical stores have failed. Amazon used to give Prime members free same-day delivery from Whole Foods Market, but now all Whole Foods deliveries cost $9.95.
However, with $100 billion in food sales last year (not including Whole Foods Market and Fresh), Amazon has found success with delivery through its basic Amazon app. Approximately 20% of users used the service more than once in the first month of the highly successful fresh food test, according to Jassy, who made this announcement during the July 31 earnings call.
He went on to say that our prices are still competitive and affordable for consumers. Our daily necessities accounted for one out of every three units sold, which is one of the reasons their growth surpassed that of the rest of the company worldwide.
However, Saunders stated that since most food shopping still occurs in physical locations, Amazon still has tangible goals in the grocery industry. Regretfully, the approach and route to success in that field are somewhat less clear.
