AMAZON FRESH STARTS S.D. SERVICE
Some customers can order groceries online for delivery for $299
Amazon Fresh, the Seattle-based retail mammoth’s subscription grocery-delivery service featuring bright green trucks, announced Tuesday that it has expanded to San Diego this week.
Residents in some ZIP codes now can bypass the traffic, aisles, lines and hauling associated with shopping for food and instead order online from some 500,000 grocery and household items on Amazon Fresh andAmazon.com, from milk and eggs to books and electronics. That also includes products from favorite San Diego neighborhood shops like Eclipse Chocolate Bar & Bistro, Venissimo Cheese and Bird Rock Coffee Roasters. People can also order from specialty shops throughout Southern California, such as Santa Monica Seafood and Canter’s Deli.
Analysts say now that consumers are growing ever more comfortable with shopping online for general merchandise, the next natural step is for them to embrace e-commerce for their grocery purchases.
San Diego consumers in qualifying ZIP codes will now have the option to pay $299 per year for Amazon Fresh, which includes its Prime membership services. The Fresh program promises next-day and same-day delivery on orders over $35. That won’t be a tough threshold to hit, with organic red butter lettuce priced at $2.99 per head and 1 pound of broccoli crowns ringing up at $3.99.
Consumers can first use a 30-day free trial to decide whether the price tag of Amazon Fresh is worth it.
RetailNet Group analyst Justin Bomberowitz said last year that the grocery service, a bold move into an industry with notoriously micro-thin profit margins, is less about making money than about the retailer, boasting nearly $75 billion in net sales last year, connecting with consumers more frequently. And he foresees profit potential in Amazon bundling consumers’ grocery deliveries with their otherAmazon.com orders as it continues growing its same-day delivery service by way of smaller distribution centers. And if drones can eventually do the delivering, so much the better.
Amazon has been testing and tweaking its grocery delivery business model in Seattle for the past seven years, eventually scrapping doorstep delivery fees in favor of the minimum-order threshold. In 2013, the company began expanding Amazon Fresh gradually to parts of Northern and Southern California, specifically the San Francisco and Los Angeles areas.
Starting immediately, the service is delivering to central San Diego neighborhoods like North Park, Middletown, Hillcrest and Golden Hill. Ocean Beach, South Park, City Heights and Mission Valley addresses also appear to be eligible, based on a test of various addresses on the website, and an Amazon spokeswoman said delivery will soon expand to parts of northern San Diego as well.
Morningstar analyst R.J. Hottovy said he thinks Amazon Fresh could be potentially disruptive to the San Diego grocery scene, where supermarkets like Vons have been testing out delivery for online orders. “It’s shown that among at least existing Amazon users, where they have a bit of a captive audience, it has some traction. It could be a potential game-changer.”
katherine.poythress@utsandiego.com