in September that it will cooperate with several local grocery stores, and expand their one and two-hour grocery delivery services to Los Angeles Country and Orange County, including areas such as Santa Monica, Silver Lake and Alhambra.
Customers can order paper towels, fruits, even ice cream from local stores such as Sprouts, Bristol Farms and 99 Ranch, through Amazon Prime Now, which is part of its $99 annual membership program. Amazon will deliver the orders to customers’ doorsteps as it does with other products.
This is not Amazon’s first trial with a grocery delivery service. The company started Amazon Fresh, the company's own grocery store, two years ago. Amazon Fresh had a more expensive annual fee than Amazon Prime at $299 per year.
“Customers love the convenience of getting items delivered right to their doors in under an hour,” said Stephanie Landry, director of Amazon’s Prime Now service.
Aside from launching Fresh, the company is now encouraging members to use Amazon Prime Now to shop from local markets like Sprouts. “$99 annual fee is acceptable. I would give it a try,” said Jing Liang, an Alhambra resident. “But I am concerned about the quality of food. How can they make sure the apple they choose for me is the one I want?” she added.
Many other local residents share the same thoughts with Liang, since shopping grocery online is not a necessity for them. “There are plenty grocery stores in Alhambra and surrounding areas. I think this service might work better to people who live remotely,” said Linda Lin, an Alhambra resident.
“I wouldn’t choose it if I have to pay,” said Sandy Whitfield a downtown L.A. resident, who used have a Prime account but canceled it recently. She said she has no problem with waiting for several days to receive other products from Amazon, such as beauty goods, toys for kids and books. For groceries, she would rather to walk into a store and pick things with her own eyes.
The grocery delivery business has not been as profitable as some had expected it to be. This is partly due to high costs and fierce competition. Moreover, grocery delivery requires a large infrastructure of warehouses, fridge trucks and many other facilities to maintain and deliver the fresh foods. Sucharita Mulpuru, an ecommerce expert with Forrester Research, told the Guardian
last year that this is a tough business for Amazon. "AmazonFresh is an enormous money pit, that's my opinion. At best a money pit, at worst a path to bankruptcy," he said, "It's a tough, tough business. I don't know if it's a business that makes sense for them."
In the face of unfavorable forecasts, technology may be a game changer for Amazon's grocery plans. The company unveiled its futuristic drone delivery plan in 2013, which would cut down delivery costs and reduce the expected time of delivery from hours to 30 minutes. Certainly, it may take some time to get used to machines landing in one's backyard, but perhaps one day it will be commonplace to see a drone delivering a bag of cheese, milk and frozen dumplings.
For some residents who think there is a lack of variety of grocery stores in Alhambra. Could this kind of delivery service be a solution?