Amazon has commenced the provision of its Fresh grocery delivery service to individuals who are not subscribed to Prime membership. The initial launch will be confined to twelve cities, which encompass Boston, Phoenix, Dallas, and San Francisco, as stated in a communication sent to customers on Wednesday.
Before, Amazon exclusively provided grocery delivery services to Prime members, a subscription that costs $139 per year and grants benefits such as expedited shipping and additional privileges.
Individuals who are not subscribed to Prime membership and wish to explore the service will incur a fee of $13.95 for deliveries under $50. This amounts to an additional $4 compared to the charge for Prime members placing an order of the same size.
For orders falling between $50 and $100, the delivery charge will be $10.95, while orders exceeding $100 will carry a fee of $7.95, as stated by the company. Additionally, pick-up orders from certain metro areas will be provided free of charge.
Amazon manages a total of 44 Fresh grocery stores throughout the country, primarily concentrated in California, Illinois, Virginia, and Washington state. Besides, the company operates over 20 cashier-free convenience stores under the Amazon Go brand within the United States. Furthermore, Amazon is the proprietor of Whole Foods, which it acquired in 2017 for a significant sum of $13.7 billion.
However, despite its burgeoning aspirations to become a prominent contender in the industry, the corporation has faced obstacles in pinpointing the optimal strategy for its operations and capturing a substantial portion of the market, a task made challenging by rivals such as Walmart and Kroger.
According to Neil Saunders, the Managing Director of GlobalData Retail, the move by Amazon to extend grocery deliveries to non-Prime members is logically sound. This decision broadens their customer demographic, a crucial factor for fueling growth, he noted.
However, given that Prime membership penetration is extremely high, the scale of the upside remains to be seen and it is likely that further changes will be needed to help move the business forward, Saunders said in an emailed statement.
Meanwhile, the company has also been trimming costs by closing some Amazon Fresh and Go stores and cutting hundreds of jobs as part of a restricting plan across its Whole Foods and Fresh grocery stores. It has also paused expansion on Fresh supermarkets as it aims to find the right formula that will allow it to scale its business.
In a blog post on Wednesday, the company also provided a look into two redesigned Fresh stores in Schaumburg and Oak Lawn, Illinois. It says the new format provides more product selections, low prices on more items and greater convenience during checkout. They also feature Krispy Kreme Doughnut shops.
