Amazon has unveiled a pilot for a subscription service tailored for Prime members, introducing a monthly payment model for unlimited grocery deliveries from Amazon Fresh and Whole Foods Market, first reported by CNBC yesterday. For an extra $9.99 per month on top of their existing Prime membership, users can access unlimited grocery deliveries on orders surpassing $35. This initiative marks the latest strategy adjustment within the online supermarket sector.
The pilot program is currently being tested in Denver, Colorado; Sacramento, California; and Columbus, Ohio. Tony Hoggett, the Senior Vice President of Worldwide Grocery Stores at Amazon, expressed the company’s commitment to refining the shopping experience, stating, “We’re always experimenting with features to make shopping easier, faster, and more affordable, and we look forward to hearing how members who take advantage of this offer respond.”
Amazon’s grocery offerings have been marked by a series of fee adjustments and service expansions. In 2021, the company implemented a $9.99 delivery fee for all Whole Foods orders, which was met with a legal challenge. Subsequently, Amazon modified its free delivery thresholds multiple times, from a $150 minimum down to the recent $100 requirement for free grocery delivery on Amazon Fresh orders.
While Amazon expands its online grocery offerings with this pilot, it continues to invest in physical food retailing. Despite the recent closure of two apparel stores, the company remains focused on enhancing its Amazon Fresh locations in select regions like Illinois and California, with plans for further store openings in 2024. This dual approach underscores Amazon’s commitment to providing diversified options for consumers in both digital and brick-and-mortar grocery shopping.
By offering an unlimited delivery option for groceries to Prime members, Amazon aims to improve the appeal of its Prime membership, which already includes various benefits such as free, rapid shipping, and access to streaming content. This move could potentially drive higher frequency and volume of grocery orders among Prime members, positioning Amazon as a more integral part of their daily shopping routines.
However, the success of this subscription may hinge on consumer adoption and response. The $9.99 monthly fee could potentially attract only the heaviest users of Amazon Fresh who rely extensively on the service for their grocery needs, while also appealing to smaller households or individuals who make fewer purchases. The additional monthly cost might present a more challenging proposition for less frequent users of Amazon Fresh.
Even so, with Amazon’s pilot subscription for unlimited grocery deliveries to Prime members, Amazon aims to further solidify its position as a one-stop destination for consumers’ daily shopping needs, offering convenience and choice through a blend of online and physical shopping options. The trial’s success in these initial cities will likely shape Amazon’s future strategies in the highly competitive grocery delivery landscape.