Amazon Makes Moves into Online Groceries

June 6, 2013

7:00 pm

You had a long day at work today, the dishes are done, and the kids are asleep, but what are you going to feed them for breakfast tomorrow? It creeps up your spine, slowly, and then dawns upon you that you have no food in the fridge. Instead of freaking out, hop on Amazon, buy your groceries, and rest easy knowing they will be on your doorstep in the morning.

Pretty unfair that the greater Seattle area has been the only market able to reap the benefits of this service, huh? Well, fret not, because Reuters released a report Tuesday, June 4th, detailing Amazon Inc.’s charge to bring new markets grocery delivery on a large scale.

Under the banner of AmazonFresh, Amazon Inc. has been serving the greater Seattle area for the last decade, testing and refining their process to see if expanding to other cities wouldd be a viable option. It would appear that Seattle was somewhat of a success.

AmazonFresh must move into these new markets cautiously though. Webvan, a startup from the dot-com era, attempted to tap the online grocery market but ultimately floundered. As Reuters says, Webvan “was a spectacular failure as the cost of developing warehouse and delivery infrastructure proved overhwleming.”

However, Amazon seems determined to do it properly, and they have potent resources available at their disposal. They have already nailed down same-day delivery for standard products in key cities like Chicago, DC, New York, and Washington thanks to nearby distribution warehouses.

Reuters reports that Amazon has been building new warehouses on the outskirts of Los Angeles and San Francisco Bay areas over the last year, too. That indicates that these cities could be the next two markets, outside of Seattle, to receive the AmazonFresh services. And while not specifying which ones, Amazon did release that there will be 20 additional markets added over the course of 2014 – some of them international.

This expansion does pose a potential threat to other grocery chains like Safeway Inc. and Whole Foods Market, but it also puts some heat on UPS and FedEx. Reuters notes that success with their grocery deliver may “underwrite the development of a broad-based delivery service employing Amazon trucks.”

Amazon wants this badly though, because grocery retail sales totaled around $568 billion last year. Continued growth is a staple for Amazon Inc. and a bit of healthy competition never hurt anybody.

Amazon will not be rolling this service out blindly or prematurely. Their testing in the Seattle market would obviously lend them tremendous insight for success, but they want to take their time to make the impending release as successful as possible.

 

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Will is a Senior Writer with Tech.Co, based out of America's Finest City: San Diego. He covers all territory West of the Mississippi river, digging deep for awesome local entrepreneurs, companies, and ideas. He's the resident Android junkie and will be happy to tell you why you should switch to the OS. When he's off the clock, Will focuses his literary talent on the art of creative writing...or you might find him surfing in Ocean Beach. Follow Will on Twitter @WJS1988

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