What more could Amazon do at how they continue to advance Same-Day Delivery in all of the facets of their services. The e-retailer is making the right moves at the right time. Now, its’ recent adjustment to AmazonFresh could be just what it needed to make more shoppers buy into it.
Amazon has announced that it will adjust its’ pricing model for AmazonFresh, as it begins an initiative to attract customers and grow sales. The same-day grocery service, which use to be $299 per year, will now be only $14.99 per month for existing Prime members only. This equates to $179 per year, which is a $120 difference for AmazonFresh, in addition to Prime member subscription costs of $99. Therefore, for $279 annually, Prime members can have it all, instead of the $299 for AmazonFresh alone, which some felt was steep. The new pricing could potentially gain momentum for AmazonFresh as the holiday season begin, as well as the e-retail leader enters the new year.
The change in fee structure could be a sign that Fresh is stabilizing and poised for more aggressive expansion,” said Keith Anderson, vice president of e-commerce analytics startup company Profitero. Anderson went on to say, “This is supported by how prominently the new fee is being promoted on Amazon’s homepage in markets where Fresh is available.” The article mentioned that some feel the high pricing was purposefully done to limit demand, while Amazon worked out the economics of the service. Either way, Amazon is certainly in the driver’s seat when it comes to same-day grocery delivery.
Another comment in the article was by Anderson regarding what the move means for Amazon in the future ahead. He stated, “This positions Fresh much more favorably. An incremental, annual $199, paid up front, was unprecedented and a huge hurdle for mainstream households to commit to, even if Prime members skew to affluence.” Usually low upfront fees for a valued-added service like fast delivery is much more attractive to shoppers. This is why most retailers offer very affordable costs and then compensate by the sale volume they receive.
One example is what Wal-Mart has decided to do with subscription fees for its new ShippingPass service. In July, Wal-Mart began piloting the program, offering free shipping with two-day delivery to draw in shoppers, in addition to its’ low annual fee of $49. This is specifically designed to aggressive compete with Amazon, being half the price of Prime at $99. Customers are able to get the same products they can buy from Amazon such as clothing, electronics, health products, and more via Walmart.com. The online items with the ShippingPass logo next are eligible for the service.
A lot of retailers are taking note from not only what Amazon is doing, but how the retailer is doing it. For same-day delivery, one viable option is to partner with a Same-Day Courier like 1-800 Courier to implement the service in major US cities and better compete online. The San Francisco Courier has the courier technology and expertise to quickly create same-day logistic solutions for any retailer delivering groceries, online products and more.
Reference: 10.7.16, www.recode.net, Jason Del Rey, Amazon finally just proved it’s very serious about grocery delivery