Amazon Makes Another Grocery Play Via Delivery

As it seeks to build its power in the grocery sector, Amazon reportedly is lowering its prices for grocery delivery in Germany, according to a report from Reuters.

According to the report, “Amazon said it would cut the monthly membership fee for fresh deliveries in Germany to 7.99 euros ($8.80) from 9.99 euros and also reduce the additional delivery fee for orders worth less than 40 euros to 3.99 euros from a previous 5.99 euros. It is also allowing Prime members to pay 5.99 euros per delivery without having to sign up for a separate Fresh membership, and is offering a 20-euro discount for new customers who spend above 60 euros and discounts for the first five orders.”

Amazon Fresh

In October, the company said it would make Amazon Fresh free for Prime members. With a new perk for Amazon Prime, free “ultrafast” grocery delivery is now available at no charge for the program’s members. Amazon Fresh was previously available for a monthly fee of $14.99, and it is now available as a complimentary benefit, the company said in a post.

Stephenie Landry, VP of grocery delivery, said in the announcement, “Prime members love the convenience of free grocery delivery on Amazon, which is why we’ve made Amazon Fresh a free benefit of Prime, saving customers $14.99 per month.”

Landry continued, “Grocery delivery is one of the fastest-growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits.” The firm pointed out that members now get fast and free grocery delivery from Whole Foods Market and Amazon Fresh.

The firm also said in the post, “Customers are hungry for options that help them solve for both weekly meal planning and the moments when they need groceries in a pinch. Fast and free grocery delivery with Amazon Fresh and Whole Foods Market accomplishes both those needs.”

The company noted that it has continued to grow grocery delivery from Whole Foods Market and Amazon Fresh over the last few months to additional cities, and noted that fresh grocery delivery is available from Amazon in over 2,000 towns and cities today.

Amazon is making a bigger play for grocery that reportedly involves opening physical stores in multiple big U.S. cities, an effort that comes as the eCommerce operator continues to make the most of its Whole Foods acquisition.

Grocery Growth

As PYMNTS data shows in-depth, Amazon has a lot of room to grow in grocery to gain ground on competitors and work toward the relative dominance it has in other retail categories. Amazon also aims to appeal to the vast majority of shoppers who still prefer to do their grocery shopping inside physical stores.

According to the PYMNTS Amazon Paycheck Index, Amazon held an approximately 1.9 percent share of U.S. grocery spending by consumers. That compares to the approximately 19.1 percent share held by Walmart, one of Amazon’s main retail rivals, a chain with its own significant logistical expertise and scope. Those figures – and the gap between them – underscore how much ground Amazon must gain to achieve anything resembling a dominant position in grocery, where delivery and technology innovation are slowly but steadily transforming the traditional brick-and-mortar food-buying experience.

Amazon, of course, has a fierce advantage when it comes to retail spending, and not just for grocery items. Consumers say Amazon is the most convenient place for them to shop for and buy things. Amazon has become the default for how consumers start their search when buying things on the web.

That led to Amazon’s increasing command of the consumer’s paycheck, as documented by the PYMNTS Amazon Paycheck Index. For example, at a 32.7 annual growth rate over the last four years, Amazon is now the largest online seller of auto parts in the U.S. More generally, and as a bigger demonstration of Amazon’s power, the eCommerce operator’s sales account for 20 percent of all electronics, 9.7 percent of home furnishings, 9.3 percent of auto parts, 7.8 percent of apparel and 5.4 percent of sporting goods (which includes books, music and hobbies). Those figures provide more evidence that over the last four years, retail sales have shifted to Amazon in key categories that were once the domain of the physical store.

Grocery, though, is another retail battlefield entirely, even though similar dynamics are in play. Expect more from Amazon’s grocery push in the coming year.