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By Dennis Limmer
Source: retailwire.com, August 2024
Amazon is enhancing its grocery delivery options with new subscription plans for Prime and Prime Access members that improve their service options. These options are not automatically included with Prime.
Prime members can choose between a $9.99 monthly plan and a $99.99 annual plan, which provides unlimited grocery delivery on orders over $35 from Whole Foods Market, Amazon Fresh, and various local retailers on Amazon.com. According to Amazon, this subscription “pays for itself after just one delivery order per month.”
For Prime Access members, a new $4.99 monthly subscription offers similar delivery benefits without requiring a Prime membership. This option is aimed at improving grocery access for low-income customers and includes features such as one-hour delivery windows and free 30-minute pickup. In a press release, Amazon stated, “We have many different customers with many different needs, and we want to save all of them time and money so they can focus on what matters most.”
The e-commerce retailer added, “Since launch, we continue to see strong sign-ups for the grocery subscription and a positive customer response. Customers see immediate value in the subscription as it saves them money on grocery delivery fees and makes their grocery shopping experience more convenient.”
Amazon’s grocery delivery subscription, which first launched back in April, includes one-hour delivery slots at no additional charge in select areas, unlimited free 30-minute pickups for any order size, and priority access to Recurring Reservations for weekly grocery orders. Amazon also offers a free 30-day trial of the monthly subscription and a two-month free trial of the annual plan.
Forbes believes that grocery is “the market Amazon just won’t give up on.” Despite the lukewarm reception of Amazon Fresh stores and the scaling back of its “Just Walk Out” technology, Amazon has revisited a strategy from its core playbook: subscriptions.
This approach may be part of the retailer’s efforts to gain share and better compete with Walmart, which captured 37% of the U.S. online grocery market in Q2 of 2024.
According to eMarketer, Insider Intelligence projected last November that Walmart’s online grocery sales would reach $58.92 billion by the end of 2024, surpassing Amazon’s $40.50 billion by over $18 billion. This will give Walmart an expanding 26.9% share of the online grocery market, compared to Amazon’s shrinking 18.5% share.
“Amazon is still trying to figure out how to compete with Walmart in the grocery space, both online and offline,” Brian Lau from Insider Intelligence stated at the time. “Whole Foods is still a key player in the premium segment, but it lacks mass appeal. Meantime, the company has paused the expansion of Amazon Fresh stores until it finds the right strategy. For online groceries, Amazon will reportedly be streamlining its shopping experience across its different brands and will be offering Amazon Fresh deliveries to non-Prime users in certain cities. A bright spot is that Amazon still boasts the most rounded out logistics network among its competitors.”
Per Grocery Dive, Amazon has navigated a trial-and-error approach with its grocery operations over the past year. However, despite challenges, the introduction of these two grocery delivery subscription plans just months apart highlights the areas where the company is finding success. With strong initial sign-ups and positive feedback, these subscription plans could help Amazon better compete against Walmart and other rivals.
As Amazon continues to evolve its grocery services, the success of these new plans will likely be a key factor in shaping its future strategy in the grocery space.
