Are Bundled Deliveries the Key to Amazon's Grocery Success?
In this Fast Five Short we discuss how Amazon is taking a significant step in enhancing the grocery shopping experience for Prime members by allowing them to combine purchases from Amazon.com, Amazon Fresh, and Whole Foods into a single cart for convenient delivery. This new feature, currently being piloted in Phoenix, offers customers the ability to shop for essentials and have their orders delivered together, tapping into the same-day delivery model that many consumers have come to expect. The conversation explores the implications of this change, particularly in the context of competition with retailers like Walmart, which has already streamlined its grocery shopping experience. Both speakers express curiosity about why it took Amazon so long to implement this feature, questioning its potential benefits for customers versus Amazon's logistical advantages. As they discuss the nuances of the shopping experience, they highlight the importance of making grocery shopping more efficient and accessible for consumers, while pondering the challenges that may arise from differentiating delivery charges and services.
Takeaways:
- Amazon is integrating grocery shopping with its regular marketplace to enhance user experience.
- The new feature allows Prime members to find grocery items and other products in one cart.
- Retailers like Walmart may be threatened by Amazon's new grocery delivery capabilities.
- This consolidated shopping experience could simplify the process for customers looking to save time.
- Amazon's strategy appears to be a response to growing competition in the grocery e-commerce space.
- Understanding the delivery fees for groceries versus regular items may become complex for users.
Companies mentioned in this episode:
- Amazon
- Amazon Fresh
- Whole Foods
- Walmart
- Target
- Costco
Thanks to the A&M Consumer and Retail Group, Avalara, Mirakl, Ownit AI, and Ocampo Capital for making this episode possible
For the full episode head here: https://youtu.be/T_30gGTzlZ4
This podcast uses the following third-party services for analysis:
Podcorn - https://podcorn.com/privacy
Transcript
Amazon is diversifying its marketplace and fulfillment centers to allow prime members to add goods from Amazon.com, comma, Amazon Fresh, and Whole Foods to one cart.
Speaker A:According to retail Dive, Amazon is piloting a new feature in its Phoenix market that enables prime members to shop for grocery items alongside Amazon.com products and have them delivered together.
Speaker A:The trial allows Amazon prime members to shop for grocery essentials, including fresh items alongside Amazon.com goods, and have them delivered together in hours.
Speaker A:The capability also gives shoppers access to the usual same day delivery speed and selection of multiple delivery windows.
Speaker A:Amazon plans to extend this model to more locations as it continues to quote, test, and learn, end quote, and anticipates more customers will continue to opt for same day delivery from Amazon for grocery shopping.
Speaker A:All right, Chris, where do you sit?
Speaker A:Are you buying or selling this consolidated grocery shopping via Amazon?
Speaker B:Buying or selling?
Speaker B:Um, I'm a hard buy on this one and, uh.
Speaker A:Oh, really?
Speaker B:Okay.
Speaker B:Yeah, I am.
Speaker B:I'm a hard buy.
Speaker B:I think it's smart.
Speaker B:I mean, that's my first point.
Speaker B:My second point, though, would be like, why did this take so long?
Speaker B:That's, that's my big question here.
Speaker B:And the other thing that, the other thing I'm going to bring to the table here is I actually think this tells me how much Walmart is eating their lunch and e commerce.
Speaker A:Grocery, yes.
Speaker B:Because if you think back, Walmart actually had two experiences.
Speaker B:I think it was like two or three years ago, they merged them together, and ever since, they haven't looked back like they're just crushing it.
Speaker B:Right.
Speaker B:Which makes sense because you want to get a, it's, it's the whole idea of mass merchandise.
Speaker B:You want to get everything in one cart delivered to you at once.
Speaker B:You don't want to have to go through two experiences.
Speaker B:Like, that's not good from a shopping standpoint.
Speaker B:So Amazon is clearly playing catch up when you think about it from that angle.
Speaker B:But swinging back around, I think ultimately it makes sense because you can get your weekly shopping list done all in one place on Amazon, and you can add any other items you want to during the course of a week or during the course of building your cart.
Speaker B:So.
Speaker B:But, and then with that said, I think retailers like Walmart, Target, Costco, they can't be liking this announcement because I think it makes Amazon more stronger in grocery part and parcel.
Speaker B:But my only question, though, I didn't have time.
Speaker B:Maybe you had time to research this.
Speaker B:I didn't have time to research it.
Speaker B:Yesterday's.
Speaker B:My other question is, like, I mean, it's only in Phoenix.
Speaker B:But how does it work with like the up charges for Amazon delivery for grocery versus prime?
Speaker B:Like, that probably gets really confusing within this flow too.
Speaker B:So I don't understand that either.
Speaker B:But, but what did you think you buy and sell?
Speaker A:Yeah, I don't, you know, I think I'm more leaning towards your, why did it take this so take them so long to do this?
Speaker A:Because to me this is like, from a customer perspective, this is just a slight modification to the user experience of ordering from Amazon already.
Speaker A:And my hope is exactly what you hit on that it actually, the benefit to the customer here is that it gets them to that $35 daily delivery threshold faster, which seems to be like the biggest benefit because before you were adding, like, say you wanted to, do you know your Amazon stock up trip, not only do you have multiple carts going and because some things are coming from Amazon fresh, some are coming from Whole Foods, and some are coming from Amazon, but to me it actually seems like this is doing more benefit on Amazon's part than it is.
Speaker A:Like on the customer front, the only benefit the customer gets, like, do they really care if their things are bundled?
Speaker A:Like, I don't know that that's the case, I think, you know, yes, maybe the delivery window being the same is, is nice, but to me it's, this is like Amazon making logistical changes, you know, doing, testing, putting more things in one warehouse so that they can have fewer drivers out on the road and fewer deliveries going to the same destination, more so than it's really like an enhanced customer experience.
Speaker B:That's interesting because I don't know, that's interesting because I don't know that I care if my deliveries are bundled, but I care that my shopping experience is bundled.
Speaker B:Like, this is actually been, this has been a limiting factor for me, trying Amazon for grocery because I'm like, oh, I got to go to another place to do this.
Speaker B:And that's prevented me from actually wanting to use it as much as I probably could have over these past few years.
Speaker A:Right.
Speaker B:Particularly during the pandemic, too, if you think about it.
Speaker B:So I think the consumer side of it for shopping is fine, but delivery points are interesting.
Speaker B:But for me as a consumer, yeah, I don't know that I care that they're bundled as long as I get them.
Speaker B:When you say I'm going to get them and my packages from Amazon arrive at different times right now, even if I check out with one cart.
Speaker B:So like, what's the big deal, you know?
Speaker A:Yeah, yeah.
Speaker A:I'm really curious to see that threshold because that's what kept me from doing it before.
Speaker A:Like you, I do want to put all my stuff in one grocery shopping trip.
Speaker A:I can get it from Amazon, but if I can't get same day delivery because I only have two items from Whole Foods and then one item from am, like, then I'm just like, no, I'm done.
Speaker A:I'll go pick it up at Target or Walmart, which I'm wondering if customers might start to do anyway.
Speaker B:Yeah, it feels like this is, there's a lot to still figure out here on how this is going to work with all the different things they've got going on in this, this whole idea.
Speaker B:And it doesn't seem, I don't know, it's, yeah, we're going to talk more about this.
Speaker B:We got, we got a complimentary headline and headline five, which I cannot wait to get to.
Speaker B:But yeah, there's, it seems like there's a lot, lot to this enchilada, and this is not a, yet, it's an enchilada.
