The AmazonFresh Pickup test is important because it could signal a change in Amazon’s grocery business strategy – with emphasis shifting away from “fine tuning” its online grocery shopping offer for a broader audience via home delivery, and toward building on its well-developed relationships with Prime members. If it succeeds, it has big implications for traditional supermarkets.
Amazon is clearly trying to find the right approach for AmazonFresh. Early on, the AmazonFresh offering emphasized improving last mile efficiency and expanding the business through its home delivery network to help spread the cost across more purchases.
The Pickup model takes a different approach. Now Amazon will be in a position to leverage a number of benefits not directly related to grocery into incentives for Prime customers to buy groceries from them. Having an established payment process and even license plate recognition, for instance, significantly simplifies the pickup process for shoppers.
Implications for Grocery Retail
If (or perhaps it’s more accurate to say when) AmazonFresh expands the Pickup model, it means two things for traditional grocers.
- Since Amazon already has strong relationships with a large and demographically attractive segment of households in their Prime members, consider it to be “a Trojan horse” in taking business from traditional grocery retailers.
- It is time for retailers to quickly assess their vulnerability to this threat, identify what portion of their core customers are Prime members, and demonstrate how and why these customers benefit from continuing to shop with that grocer.
Per Geekwire’s test drive of the new system, AmazonFresh Pickup’s current assortment of products is not as complete as Fred Meyer’s, but the speed of ordering and efficient and easy pickup system continue to emphasize great customer experience as the goal. Check out Todd Bishop’s experience below.