As everyone’s lifestyles become increasingly busy and hectic, seemingly small tasks become time consuming and exhausting; case in point, going grocery shopping. However, this has opened the door for delivery services and new ways for the grocery industry to meet their customers’ needs. One of the newest companies to jump on the bandwagon is everyone’s favorite provider of, well, everything: Amazon. It’s time to deliver the goods on the top 10 untold truths about Amazon’s Fresh Food Delivery.
10. Successful, yet unsteady market
Amazon Fresh is available in many American cities, such as Los Angeles, the Seattle area, New York City and Boston. However, much like its original source, it is slowly expanding into non-American cities and countries, such as Tokyo, Berlin and central/eastern London. It must be noted, though, that Amazon Fresh does not deliver to dormitories or closed locations. It is also no longer available in certain parts of Philadelphia, New Jersey and California. However, Amazon’s recent partnership with Whole Foods could bring back services to these areas, so keep an eye out for its return! Despite its wide availabilities, Amazon Fresh has had its fair share of challenges in establishing itself as a leader in the grocery industry. Amazon began to break its way into the industry in Seattle in 2007. A little over a decade later, it has not established the same sort of stronghold it expected. According to Professor Ralf W. Seifert, it is in less than half of the cities than competitor Peapod. Despite its struggles, Seifert suggests that Amazon Fresh has more tricks up its sleeve. First off, it has a different supply chain configuration than its competitors. While other online grocery stores give direct access to their products within the stores, Amazon Fresh uses certain smaller replenishment centres, mainly located outside of larger urban areas. This allows for them to provide up to 500,000 extra items for delivery in their catalogue. Also, since Amazon Fresh is linked to Amazon Prime, it has the potential to absorb any outstanding costs, such as warehousing, and allow for fuller trucks to be sent out to consumers.
9. Quick delivery time and partnerships
Staying true to Amazon’s policy of never keeping their customers waiting, Amazon Fresh deliveries can reach destinations within 24 hours. The program offers two delivery methods: attended or doorstep delivery. If you choose in-person delivery, you can reserve a one-hour window where you will be present to receive the package. If you are not available and choose to go for doorstep delivery, you can reserve a 2-3 hour window where your package can be left at your door. An example of them doing good on their promise of good delivery is their partnership with Fresh Thyme Farmers Market in Milwaukee to launch a one and two hour shipping service. Fresh Thyme, oriented around selling healthy and organic produce, has recently entered the market in Milwaukee with plans to further expand into Wisconsin. Another partnership that Amazon Fresh has embarked on is with the cooking app SideChef. Any users of the app that have Amazon Prime are able to receive home delivered ingredients either the same day or next. To quote the apps’ CEO and founder, Kevin Yu, ” From culinary inspiration to grocery delivery and meal planning to developing the latest in guided cooking technologies, SideChef is paving new ways in learning to cook for any occasion.”
8. Green Tote Bags
These reusable and recyclable tote bags are a staple of the Fresh program. These recyclable totes usually contain ice packs or dry ice, as well as large paper bags to hold and preserve your products. They can either be recycled or picked up on your next order. Damaged goods are eligible for refund, so make sure that you contact customer service representatives if you ever experience this. The Green tote bags, as ecologically friendly as they may be, open up a discussion about one common criticism about Amazon Fresh: the amount of packaging. One Amazon Fresh shopper has stated that she has shopped with Amazon Fresh since her children were young due to its convenience, prices, and product availability. She makes a few recommendations about reducing plastic and packaging waste. Amazon has implemented the use of re-usable paper bags, but they also give you the option to send back any plastic bags for re-use. Customers’ awareness towards which products use excess packaging, as well as their willingness to communicate with Amazon to see change in their department is another way to see a reduction in plastic and excess packaging.
7. Reasonable Prices
To benefit from Amazon Fresh, you must first have an Amazon prime membership, which accrues an annual cost of $99. As a member, you can benefit from a one-month free trial period with the program. Amazon Fresh, unfortunately, does not come free with an Amazon membership and costs an additional monthly fee of $14.99. Combining these two costs results in an annual fee of $280. While this may sound a little on the expensive side, you need to factor in the myriad of costs like gas, coupons, and savings – and your own saved time into the mix. Free shipping is available only if you spend a minimum of $40 dollars. Another great purchase you could make (and opportunity to acquire a three months free trial) is the company’s Dash Wand. The Dash Wand is a small, portable device that is guaranteed to make your shopping life that much easier. Connected with Amazon’s own “Siri”, “Alexa”, you can find recipes, use it as a virtual measuring cup, buy and order groceries and much more.
6. “The Amazon Effect”
According to founder of Verma Media, AJ Agrawal, the “Amazon Effect” refers to the difficulties that other companies face when competing with Amazon. With its vast array of high quality products, affordable prices and short delivery times, Amazon has created a unique customer service experience and subsequent high expectations that other companies struggle to keep up with. Agrawal has made certain predictions about how the “Amazon Effect” will influence the market, specifically the e-commerce market in 2019. For one thing, there will be an increase in courier software usage. A 2018 survey revealed that 43% of customers expected faster delivery, meaning that more companies will attempt to match or exceed Amazon’s delivery methods and times in order to meet these higher expectations. Another change expected to happen is that mobile users will take priority over computer customers. A 2017 report from advertising platform Criteo showed that e-commerce stores were making the majority of their sales through mobile devices and that the number of computer users, particularly during the holiday season, was continuing to decrease. Amazon’s jump into the online grocery industry has inspired other companies to follow suit, resulting in many partnerships and acquisitions. For example, Target bought the start up company Shipt, specializing in same day delivery for $550 million, and Walmart announced a partnership with Alert Innovations, a company that uses automated carts to carry out grocery pick up orders.
5. Connection with Whole Foods
Amazon Fresh’s investing in Whole Foods serves as a strategic move to solidify their platform for online grocery. Whole Foods has mastered the fields of private label branding and organic/natural products. Having a partnership with Amazon is an asset that will allow Amazon to further excel in these areas. Another asset of this partnership is the fact that Whole Foods has a history of creating a customer friendly image and platform with a goal to educate in the areas of community, environmentally conscious initiatives, and health. An improved customer oriented image would be a bonus for Amazon to acquire. In this same vein, it gives Amazon the opportunity to add another layer to their human employees. While there will be an increased presence of automation, there will be more human employees present in stores such as food concierges, personal shoppers and chef educators. These employees are not “selling” products per se, but serve more as educators. Whole Foods’ enveloping within the Prime program allows Amazon to receive data on its grocery consumers, which allows it to keep the best stock and predict buying patterns.
While Amazon has always been a trail blazer as far as breaking into new industries, and even creating them, many new companies are vying for Amazon’s spot at the top of the market. While Amazon Go has been aiming for cashier-less stores, other companies are not far behind. Here are just a few of them. Chinese fashion retailers Jack and Jones, and Vero Moda have opened up their own smart stores in Shenzhen and Guangzhou, with facial recognition as their defining factor. After completing a facial recognition registration in store with smart payment feature, WeChatPay, their face will be read and payment authorized as they leave the store. Even in the dressing rooms, there are facial recognition mirrors that recognize customers and even recommend items to them based on shopping history. Netherlands supermarket chain, Albert Heijin, follows a similar cashier-less approach to Amazon’s. Two of their stores allow customers to tap their phone on item tags and, shortly afterwards, their accounts are debited. Beverage brand Dirty Lemon expanded from online to in person shopping, setting up shop in Tribeca, New York. Payments occur via text, heat-map trackers keep an eye on customers throughout the store, and RFID technology inventories. South Korean department store mogul, Lotte, follows in Jack and Jones’ footsteps, only with palm vein verification, aptly called HandPay. This technology aims to combat fraud.
3. Automated Warehouses
As technology advances and evolves, the idea of having automated employees (aka robots) taking over various warehouse positions has entered the talks. However, that may not be the case for a while, according to Amazon Robotics fulfillment director, Scott Anderson. He states that this wouldn’t come to fruition for, at least, 10 more years. At the moment, the technology is limited in matters such as whether a robot can pick a single product from a bin without risking damage or picking up multiple items at a time in an efficient manner. This discussion was sparked after complaints were made about poor working conditions in Amazon warehouses and the increasing want for decreased human labor. Though there are certain warehouses that employ robots, they only handle general merchandise and non-perishables, like clothes, bicycles and the like. Derek Jones, global director of environment health and safety at Amazon stated that “Just imagine if you want bananas. I want my bananas to be firm, others like their bananas to be ripe. How do you get a robot to choose that?” Needless to say, there is still a ways to go before the technology is developed enough to let robots handle fresh produce.
2. Investing in physical grocery stores and expanding
The road to normalizing online grocery has not come without its challenges. Chief Executive of TABS Analytics, Kurt Jetta, stated that only 4.5% of shoppers made purchases from an online grocery. He added: “There’s just not a lot of demand there. The whole premise is that you’re saving people a trip to the store, but people actually like going to the store to buy groceries,” In response to these statistics, Amazon began to take more interest in “brick and mortar” grocery stores and have purchased supply-chain software from LLamasoft Inc. They are in the process of testing out three models: convenience stores, drive-in grocery kiosks and hybrid supermarkets that are the best of both worlds in terms of online and in-store shopping. And it hasn’t stopped there. Amazon opened their one of a kind store “Amazon 4-Star” in the New York neighbourhood of Soho. This store only sells and carries products that Amazon users have rated 4 stars and above. Amazon members receive discounts on these products and non-members receive an opportunity to try a 30-day trial in order to benefit from said discounts. Another example of their foray into the world of physical grocery stores is that of AmazonFresh Pickup. This drive-thru concept allows Amazon Prime customers to order their groceries online and then pick them up at designated locations. They have partnered with other grocery giants, such as Walmart, Target, Fred Meyer and QFC to offer customers similar pick up services.
1. First step to the future
Amazon’s Fresh program is the first step in Amazon’s breaking into the grocery industry. The Vice President of Amazon Go, Dilip Kumar, stated that “One of the things that kept coming back was people don’t like waiting in lines” when Amazon started working on retail stores back in 2013. It has now begun opening its own chain of supermarkets, Amazon Go. They are described as sleek, modern and minimalist. What makes them stand out, however, is the fact that there are no cashiers, cash points or self-service check out stands of any kind. Instead, as you pass the turnstile on the way out, Amazon bills your purchase on your credit card. All the details of your purchase and even how long you spent in the store are sent to an app. Now if you’re wondering whether this will make shoplifting, a phenomenon that costs retailers $47 billion annually, all too easy, then you may be surprised. CNN Business’ Matt McFarland tested the system himself. He reported that there are hundreds of cameras that track a customer’s every move and keep tabs on everything that is picked up. The software is also able to discern labels and packaging differences, which avoids mischarges. This new technology can allow for the renting of smaller spaces, an easier time ordering and restocking, as well as accrue large amounts of customer data, which allows for an increase in offers and discounts.