Amazon on Thursday announced that its AmazonFresh Pickup concept is now open to Amazon Prime customers in Seattle, according to an email from a spokesperson sent to Retail Dive.
The service is free and exclusive to the company’s Prime members, who can reserve a time for pickup with as little notice as 15 minutes and no minimum order.
Amazon employees “carefully select groceries,” according to the announcement, bag them and bring them out to customers waiting in their cars at specially-designed Amazon Fresh stations.
Amazon helped stoke a thirst for swift delivery that many consumers never knew they had, and now curbside pickup appears to be heading to a similar level of competition among grocery retailers. Wal-Mart has been expanding its own grocery pickup services and experimenting with various formats, and many traditional retailers (which have offered delivery and pickup services for years) are also expanding and marketing such services.
Still, in some ways this is a curious move, considering that grocery customers aren’t exactly clamoring for pickup services, according to Matt Sargent, senior vice president of retail for Frank N. Magid Associates. The consulting firm's research found that only about 28% of grocery customers say that the ability to order online and pick up in-store is important — the lowest category of all those Magid measured. By comparison, some 46% of customers favor online ordering and store pickup services for other retail categories, Sargent said.
That could be largely due to the fact that many consumers still want to choose their own food. And that may be why the video that Amazon released Tuesday emphasizes snacks — a category in which it has introduced its own private brands. Amazon doesn’t even really run a grocery store yet, for that matter. Its Amazon Go checkout-free prototype is positioned more like a convenient store — though it has been running AmazonFresh delivery services in key urban areas of the U.S. for years now.
Amazon acknowledges consumers' preference to pick their own foods, especially when it comes to fresh meats and produce, and Amazon Fresh employees have said that it takes a high level of trust. “Selling perishable goods is a very different space than selling non-perishable goods,” Amazon Fresh software development manager Mareen Phillips says in a video about the company’s solutions in the space.
Even Amazon is clearly waiting to see how the pickup service goes. Sargent said it's important to keep in mind that, unlike many other grocers, the e-commerce giant has the time and resources to experiment, and that its ultimate goal is to become indispensable to Prime members.
“Amazon has the luxury to invest in these things. It seems to exist almost in a different law of physics,” Sargent told Retail Dive. “I don’t think Amazon really wants to profit from it, and that’s a scary proposition. Sure, if they can, that’s great, but the bigger goal I think is to fill out that ecosystem. This presents an excellent testing opportunity for rival grocers, and that’s where they should be lined up and quickly respond. The sit-and-wait approach is an absolute death sentence. If you wait for Amazon to establish a foothold, it’s too late."