Amazon continues to juice from its Whole Foods acquisition in a move to win over U.S. grocery shoppers. Customers can now place orders via Amazon’s Prime Now app and ask for curbside pickup upon arrival at a store. The service is now available in Sacramento, California, and in Virginia Beach, Virginia. Amazon plans to expand to more cities through the year.
“Pickup from Whole Foods Market is a perfect option for customers who want to grab healthy and organic groceries at their convenience, all without leaving their car,” said Stephenie Landry, Worldwide Vice President of Prime Now, AmazonFresh and Amazon Restaurants. “A customer can order at 5:00 p.m., pick up at 5:30 p.m., and we’ll have their groceries loaded into their car just minutes after arrival. For an even faster experience, customers can tell us they are on their way using the Prime Now app and groceries will be ready as they arrive.”
The world’s largest online retailer wants to add yet another feather to its cap by tapping on the $800 billion market for U.S. groceries by promising better delivery and greater convenience. Larger grocery companies like Kroger Co. and Walmart Inc. have rolled out pickup to thousands of stores in the U.S.
For orders over $35, the grocery pickup is free. Under $35, the pickup costs $1.99. Customers willing to shell out a few bucks for an even faster experience can opt for the “in 30 minutes for $4.99” pickup option.
Customers of the grocery pickup service will get designated parking spots at stores. They must be members of Amazon Prime, the retailer’s subscription club to use the service. In order to make its subscription service more appealing, Amazon is planning to raise the annual fee by 20% to $119.
According to ratings firm Nielsen, around 15% of digital food and beverages sales go to online grocery pickup. Beer, wine, cheese, and frozen meat are some of the most frequently purchased items. It also found that “click and collect” customers tend to be less affluent than those who buy their groceries online.
Having customers pick up their own groceries would be more profitable than delivering them because companies can save on the transportation cost to a customer’s home. It would also increase footprints to stores, something traditional grocery stores are seeking to avoid losing sales to big retailers.
For years, Amazon has struggled to master grocery delivery. Part of it is due to the logistical complexity of it. Previously, the online retailer has tried grocery pickup and failed miserably at it.