This story was delivered to BI Intelligence "E-Commerce Briefing" subscribers. To learn more and subscribe, please click here.
Amazon has opened a pair of drive-thru grocery pickup stores to the public in Seattle, allowing customers to pickup their AmazonFresh grocery orders instead of having them delivered at home, The Verge reports.
The store openings mark the latest step forward in Amazon’s fledgling efforts in both the US grocery market and brick-and-mortar retail.
AmazonFresh members — who pay an extra $14.99 monthly fee on top of their regular Prime subscriptions — will be able to collect grocery orders at the drive-thru locations within 15 minutes of their purchase. Normally, AmazonFresh customers have to wait a minimum of two hours for home delivery of their purchases. The two locations also will use image recognition technology to speed up the pickup process. The first time a customer drives in to one of the curbside pickup locations, their name and license plate are registered, so their cars are automatically recognized on subsequent visits, expediting checkout.
This curbside-pickup model has been particularly successful for other grocers. Walmart, which has been growing its share of the US grocery market lately, offers in-store pickup for grocery orders at 600 locations across the US. In addition, UK grocers like Tesco and Sainsbury’s have invested heavily in their click-and-collect services, leading to a significant hike in their e-commerce sales. Online grocery sales in the UK are projected to grow from £8.6 billion ($11 billion) in 2015 to £15 billion ($19.2 billion) in 2020, according to data from Mintel. Click-and-collect has proved successful for UK grocers because customers often place orders on their smartphones and pick them up on the way home from work or other errands.
Amazon must build out a brick-and-mortar presence in order to truly break into the $600 billion US grocery industry. Online grocery sales made up less than 1% of grocery sales in the US last year, BI Intelligence estimates. So Amazon needs to expand its brick-and-mortar presence to really challenge established players in this space. Click-and-collect should provide an easy way for Amazon to start building that presence by leveraging its existing online customers. Meanwhile, the e-commerce behemoth will continue to experiment with other grocery store formats —such as its cashier-less Amazon Go store model — to find ways that it can differentiate its in-store shopping experience from other grocers.
To receive stories like this one directly to your inbox every morning, sign up for the E-Commerce Briefing newsletter. Click here to learn more about how you can gain risk-free access today.
Read Full Story
Facebook
Twitter
Pinterest
Instagram
Google+
YouTube
LinkedIn
RSS