Amazon Fresh 11 year from now

Shopping for groceries can be a tedious affair. The whole event is so slow it would make snails feel respected. Worst of all, it’s a chore that’s never finished.

Ironically, we have so much technology at our disposal that such a shopping experience ought to be such a quick sport by now. Couldn’t it just be as simple as subscribing to a product instead of going on those random shopping trips?

Brick-and-mortar stores seem to be lacking creative ways to ‘gamify’ the whole experience. Some, like WebVan, have come and failed miserably. Others like Peapod, Fresh Direct, Safeway and more, are making good headway.

But perhaps what’s baffling is that despite the inefficiencies associated with grocery shopping, the number of shoppers keen to try digital grocery shopping is remarkably low (more of the figures shortly).

Today though, I wanted to bring the focus on one of the fastest growing players in the online grocery shopping sector: the Amazon Fresh app. I did a good deal of digging around, and here’s what I came up with.

Amazon Fresh Strengths

  • Amazon Fresh presents a fantastic opportunity for anyone who wants to make grocery shopping a walk in the park.
  • Placing orders with the app is quick and easy.
  • Convenience: Few would balk at the idea of having groceries delivered to their doorstep.
  • There is no significant difference between shopping for groceries on the Amazon Fresh app and shopping on Amazon. It comes with convenient functionalities like search and browse, barcode scanning, and the option to easily add items from past purchases.
  • Amazon has come good on their promise to offer ‘reduced prices on thousands’ of items purchased through Amazon Fresh. Consumers thus stand a big chance to make significant savings.
  • Product selection is very good in terms of diversity.
  • Free delivery for any purchases above $50 seems reasonable.
  • Amazon Fresh also delivers toiletries and prepared meals, not just groceries.
  • A free 90-day trial allows customers to try the experience risk-free, and if they like the service and quality, then they can get to bed with Amazon Fresh. If not, there are no binding ties.

Amazon Fresh Weaknesses

  • The $50 threshold for produce to be delivered may be inconveniencing if you look at it from the perspective of those times when you require just a single ingredient, or two, for dinner. These sentiments were echoed by a study published by eMarketer which revealed those who spent $125 or more on average per trip are more likely to buy groceries online than those with smaller baskets of under $25.
  • Delivery is not free per se considering the fact that you have to tip the driver $4. Every time. Now, despite the few coins you had managed to save on a product-by-product price comparison with other stores, the tip in most cases raises the total shopping cost. It’s a perfect case of giving with one hand and taking with the other (Harris Teeter Express Lane and Safeway.com employees do not accept tips as company policy, FYI).
  • As mentioned earlier, online — or better yet, digital — grocery shopping, is yet to be embraced by the masses as you would expect at this moment in time. In 2014, for example, a poll by Google and TNS put the number of US shoppers who made a digital grocery purchase at a resounding zero. Zilch. Nil. This was the three months prior to the survey. However, another study in 2015, this time by Door to Door Organics and 72Point, revealed that digital grocery shoppers had increased their online purchases by about 30 percent compared to a year before.
  • The annual subscription of $299/year may prove too prohibitive for a large demographic ($99/year regular Amazon Prime membership plus $200/year for grocery delivery). This is better suited to a household with kids, or for new moms, or that busy worker, albeit some singles might feel shortchanged.

Amazon Fresh Marketing Opportunities

  • Few brands resonate with consumers at the household level as Amazon does. The Amazon Fresh app therefore has a powerful name behind it, and there are obviously glaring benefits that come with that perk especially when compared to a service that’s trying to make a name for itself.
  • Amazon has an impressive infrastructure throughout the United States and same-day delivery in certain markets.
  • The backing of Amazon’s money coupled with the impressive infrastructure means few, if any, would stand in the way of Amazon Fresh were it able to solve the consumer’s need best.
  • A proven record of good customer service.
  • For the next couple of years, digital grocery shopping is only headed one way, and that is up. This presents a great opportunity for future growth.
  • At the moment, Amazon Fresh is only available in a select few cities including sections of Seattle (where it made its debut), New York, New Jersey, San Francisco, and Los Angeles.

Amazon Fresh Product Opportunities

  • Amazon Fresh is bound to (and does) appeal more to younger consumers who are the prime users of digital platforms. In fact, the aforementioned 2015 study noted consumers who had increased online grocery shopping in the past year were those between the ages of 22 and 34, followed closely by the 35–44 age group and then 18–21-year-olds rounded the top 3.
  • Looking at the future, Amazon Fresh (and Amazon) will work in conjunction with Amazon Dash Buttons, Wi-Fi-enabled one-touch devices for re-ordering common products in your home. Once groceries are integrated into the product list, ordering supplies will be as simple as stealing candy from a baby (we hope).
  • The one place digital wouldn’t hold a candle to brick-and-mortar store trips is when it comes to personally choosing your own produce. As much as Amazon leaves wriggle room to choose between ‘ripe’ and ‘not ripe’ avocado, most of everything else is a gamble. Tomatoes, for example, might be ‘ripe’ but too mushy for your liking. Unsatisfactory orders can be refunded but this won’t be until the next day.
  • Lack of extra features like delivery-tracking system to monitor the location of the green truck. Or a 15-minute alert via text message to let you know the delivery is nigh.
  • Anyone with issues carrying heavy stuff (or without a car) need not worry any more.
  • Going from $99/year to $299 is still a huge jump and one of the top factors opinion is sharply divided.

Amazon Fresh Service

  • No chance of getting emergency supplies because orders have to be placed well in advance. For instance, if you want produce for dinner, you have to place an order by 10 a.m. Orders made later in the day don’t arrive until the following morning.
  • Let’s split this delivery point into two. While you can’t source groceries ‘on-demand’, knowing what you want in advance could save you the trouble of having to fetch it yourself. Warm lemon water aside, there are few rewarding things in the morning than waking up to the sight of your groceries neatly placed by the doorstep.
  • The $300 annual fee for the service may be a bit steep for many people. Unless time spent going to and fro is money, as opposed to a much deserved evening gait for you.
  • For some ZIP codes, you have to avail yourself within a one-hour window to pick up your food — assuming drop-off deliveries don’t cover your area.

Amazon Fresh Competition

The competition in this segment is heating up and theoretically, you won’t find one better than the other on all fronts. Prices will vary from one store to the next, and so will those from the same store but in different cities.

  • Amazon Fresh faces an uphill task to establish its footprint in some cities like New York where the likes of Fresh Direct and Peapod seem to have the larger bite of the pie: 41 percent and 23 percent respectively compared to Amazon Fresh’s 5 percent, according to 2015 figures from Survey Monkey.
  • Still, these same markets are windows of opportunity and gaining a larger share depends on how well Amazon Fresh differentiates itself from the pack.
  • There is opportunity for future growth as more and more people embrace digital grocery shopping.
  • Most of these stores will never match the freshness of a farmer’s market (organic produce or not) as anyone who happens to have one within their vicinity will admit.
  • Still, that $4 tip…

Overall, Amazon Fresh is a great offering and one that will work especially for a super busy family and a good number of millennials who would rather fork out the additional $200 in exchange for missing the weekly trip to the grocer.

Amazon does a good job of offering a 90-day free trial period (just enough time to get people hooked), but the annual subscription fee after that seems a bit steep and one of the biggest pain points. Whether or not the service is worth the money will remain a moot point, and a factor that boils down to personal choice.

At least, we got many options to choose from, eh?

Have you given the Amazon Fresh app a try yet?