The eCommerce giant launched a pilot program in August, using the purchase histories of Whole Foods shoppers who use their Prime memberships to suggest the same products on its main website with the bonus of free two-hour delivery. The company then quickly extended the service to almost 30 cities, including Los Angeles, Houston and Detroit.
“Most grocery customers buy the same things over and over again,” an Amazon spokeswoman said in an email to Bloomberg. “The past purchases feature enables customers to quickly add favorite products to their cart.”
Amazon is hoping the program will enable it to better compete with Walmart in the $840 billion U.S. grocery market, where Walmart and its Sam’s Club receive 25 percent of all grocery spending in the U.S. Amazon and Whole Foods only get 2 percent, but it's important to note that Walmart has more than 4,500 U.S. stores, about 10 times the number of Whole Foods locations.
“Amazon has been critiqued for not making full use of the Whole Foods acquisition, and this is about to change that,” said Juozas Kaziukenas, founder of New York e-commerce research firm Marketplace Pulse. “Having local stores act as two-hour delivery hubs is exactly why Amazon acquired the company.”
In the meantime, Walmart is expanding its own grocery delivery options. In June it launched its latest offering, the “Delivery Unlimited” subscription, which will offer consumers the option of either paying $12.95 per month plan or a $98 per year for a subscription that will let them shop online and have their groceries delivered as often as they like.
At $98 per year, Walmart’s Delivery Unlimited service is competitively priced with Target’s Shipt, which runs for $99 a year; Instacart, which is also $99; and Amazon Prime, which is $119 (but comes with other services).