How many times have you gone to the store with a specific mission to buy something, only to forget it? You remember it as soon as you get home but the thought of schlepping back to the store is just too much.
Amazon has a solution for you — at least if you’re an Amazon Prime member. Now you can get free one-day shipping on $1 items, and it’s likely you’ll get them delivered the same day. Tap here to see how Amazon is going after the grocery market.
That’s a major threat to smaller retailers, but while Amazon futzes around with dollars, brick-and-mortar retailer Walmart may have just delivered a crippling blow to Amazon’s grocery delivery service.
No more extra trips to the store
So you forgot to grab a new toothbrush as you dashed through CVS. If you are an Amazon Prime member, you don’t have to worry about making another trip. Just grab your phone and order the $1 toothbrush from Amazon and it will be shipped and delivered to you on the same day.
Before, Prime customers had to order at least $5 worth of items to get free one-day shipping and delivery. Now that restriction is gone.
It’s the latest move by Amazon as it tries to corner the grocery store delivery market. This parry is aimed primarily at smaller retailers such as CVS and Target, which offer pickup service or same-day delivery (for a price).
This is great for Prime members, but it will likely put a strain on Amazon. After all, finding the item at a distribution center, packing it and delivering it will far outweigh the cost of the item. In short, this could end up eating away at Amazon’s bottom line.
But it could also be a short-term calculated risk. If such a tactic hurts smaller rivals, the losses may be worth it in exchange for Amazon extending its retail footprint in important markets.
Surprise attack from Walmart
For the past year, Amazon has been trying to challenge Walmart in the grocery delivery market. Right now, Walmart dominates. And it looks like it will continue to lead. On Tuesday it launched its InHome grocery service in Kansas City, Pittsburgh and Vero Beach, Florida.
Not only does InHome provide same-day delivery, drivers can enter the home and put perishable items in a customer’s refrigerator too. The service costs $20 a month (not including the price of groceries) and will require a $50 smart lock device that will be installed at no additional cost. The first month is free, so your initial annual cost is $270.
Amazon has already been operating a similar project called Amazon Key. So far, it’s mostly been used to deliver packages inside customers’ homes, but it does offer a grocery delivery option. The initial annual cost is more prohibitive. Add the $119 Prime membership, an optional $15 to access Amazon Fresh, plus $200 for a smart lock kit and you’re looking at $334.
Then there’s also the question of how a company best known for delivering books and electronics will be able to access fresh groceries. Amazon is reportedly working on a new low-price grocery store format that prioritizes online order pickups and deliveries.
According to the New York Times, the stores would be smaller than those of major grocery store chains, but they would have a much larger storage area. Making the stores smaller but having a larger storage area means that it would be easier for employees to restock items.
This means Amazon can keep more items in stock for online orders and same-day delivery or pickup. The goal, from store to parking lot, would all be aimed at getting customers in and out quickly.