Amazon Pushes Deeper into the Grocery Market

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When Amazon first announced its beta test of the Fresh program in 2007, it was a long foray from the Internet retailer’s world-class selection of books, electronics and other popular, non-perishable items.

Fresh aimed to deliver groceries to Prime customers in cities like Seattle, Los Angeles, San Diego, New York and Dallas for a small fee. Amazon has now announced an almost inevitable expansion of their Fresh program, called Fresh Pickup.

Doing Grocery Retail Backward

Amazon has long been known as the eCommerce company that really got eCommerce off the ground.

With no physical stores, only warehouse and data centers, Amazon grew by leaps and bounds as it shipped products to customers across the globe with increasing speed. However, Amazon’s growth also gave the company reason to expand into other areas of retail in order to remain sustainable.

Fresh was an attempt to capture part of the $674 billion edible groceries market, but it was a wholly virtual program where customers placed an order and it arrived at their homes without the customer having ever stepped foot inside a real store. This can work well for dry boxed and canned goods, but when it comes to fresh produce or frozen items, many shoppers want to see what they’re getting before they agree to pay for their goods.

Enter Fresh Pickup 

That’s where Fresh Pickup comes in. Customers can touch, smell and reject the items they asked Amazon to select for them, even so, there still isn’t a retail location for produce aficionados to pour over fruits and vegetables.

In this way, Amazon’s approach to grocery has been a little bit backward. Instead of having a brick-and-mortar store first, like supermarket competitor Kroger Co., then adding pick up and eventually, delivery, it went through the process in reverse, starting with the costlier grocery delivery.

However, this doesn’t mean that Amazon Fresh or Fresh Pickup are terrible ideas. In fact, Amazon has so much faith in its ability as a grocer that it’s testing a cashier-free convenience-style store called Go, located in Seattle. Although that location is still working out the bugs, Amazon looks like it can’t be stopped right now. Its success as a bricks and clicks retailer may be cemented in the grocery segment.

 

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