In an effort to enhance customer experience in the United Kingdom, Amazon has launched a fresh grocery delivery service called Amazon Fresh in the island nation. The service currently covers 69 postcodes in East and Central London, and offers a one-hour order-to-delivery time for orders placed between 7 am and 11 pm.
The biggest advantage that Amazon will have over large local supermarkets and other grocery stores is their same-day delivery option. Amazon’s Prime Now, the banner under which this service is being offered, costs an additional £6.99 per month that’s not included in the £79 subscription fee for Amazon Prime.
In a related marketing effort, back home in the United States Amazon has launched a restaurant delivery service in Miami, Florida, and Atlanta, Georgia. Users can either use the app or go to the newly built Prime Now website and browse menus and order food directly through Amazon. This particular service is free for all Prime members, and does not include any additional service fees, menu markups or delivery charges – what’s on the menu is exactly what you pay. Amazon has even gone as far as to offer a refund on an item if the price on Prime Now is higher than the restaurant’s current online menu, and the offer is valid for a full 24 hours after the order is placed.
It’s amply clear that Amazon is building its portfolio of services on Amazon Prime, but what’s even more interesting is that there’s no sign that these top line additions are doing anything to help their shipping costs. Those costs are still way over the top, and have been increasing as fast as their top line has been growing.
Still, with each month, Amazon is stepping hard on the gas to offer more value-add services to its users – specially its Prime members. The test with the Prime Now additional fee in the UK and the impact it has on overall usage of the service will give them tremendous insight into consumer habits in the country. In turn, that will help them further refine the service before they start widening service availability.
The strategy is sound, however, and it’s exactly what they’re doing at AWS with cloud computing and related services. The entry fee is low, but once the customer is in, there are a host of value-add services that are truly useful and save both time and money in the long run. This helps form a symbiotic relation between the company and the consumer, and that’s what long-term loyalty is all about.