Amazon Prime has been a huge success for the online retail and technology company. Though there is no official confirmation about the number of members under the Amazon’s membership program, BusinessInsider estimates the number to be around 65 million. That’s a lot of members, but we must also note that Amazon barely has a presence in the +600 billion dollars’ worth grocery market, which means a major portion of its Prime customers are buying their groceries from other places.
Amazon has been dabbling with the grocery market for more than a decade now. Amazon Fresh was first launched in August 2007 in Mercer Island, Washington. Ten years later, they only have few cities in United States under the Amazon Fresh program.
The grocery market has always been a huge headache for Amazon because all of us love to see our produce before we buy them. Yes, there have been times I have ordered my grocery online, but I can count the number of times I have done that – and still have a whole hand of fingers left over!
At the time, Amazon didn’t have the physical store footprint that would not only have allowed customers to walk in and get their groceries, but also formed a huge support in the shipping journey of perishable goods.
That’s changed a lot, and that’s the most likely reason Amazon has started experimenting with the new concept, AmazonFresh Pickup, which allows customers to order online and pick up their order at a nearby location.
Will it be an instant success for Amazon? That will depend entirely upon how Amazon Prime Customers are going to respond to the program.
Here’s why.
Amazon Prime members have already paid their membership fee, so they are already incentivised in a big way to take advantage of whatever Amazon offers.
These are customers who are used to ordering online, but they are still forced to go to a brick and mortar store to buy their groceries. Now, Amazon is almost ready to start teasing with free, un-limited pickup orders, and Amazon Prime members will eventually be able to pick up their orders in as little as 15 minutes.
Assuming the product quality is as good as anywhere else, Amazon Prime members will certainly give it a thought before continuing with their current grocer vs. Amazon’s new program.
If Amazon is not able to convince Prime members in locations where it has an AmazonFresh Pickup store, then it will be a tough sell for the larger market. As of now, Amazon is testing a drive-in concept with just its employees, the way it did with the Amazon Go cashierless concept store. They’re calling them ‘beta participants.’
We don’t know if Amazon wants to create an in-store, in-person shopping experience, as there are several advantages and disadvantages to that concept. But what is clear is that if Amazon Prime members do not get on board, Amazon needs to completely re-think its grocery plan.
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