Amazon Looking To Carve Out A Bigger Space In Grocery Delivery Services

There are three big giants in the grocery delivery space right now: Amazon, Walmart, and Target. And they've got a lot of competition. These corporate giants continue to increase investment in this space, despite recent data suggesting that the online grocery shopping trend might be on the decline.

Just this summer, Walmart announced that it was going to partner with Lyft, Uber, and Deliv, in order to further test its grocery delivery service. Their corporation is seeing monthly growth of about 25 percent for grocery delivery. Target has decided to work with Instacart and Curbside in order to carry-out its delivery services in cities like San Francisco, New York, and others. Amazon has its own grocery service, Amazon Fresh, that is a subscription-based delivery service and they have expressed their eagerness to continue funding further development of this area of their business.

For now, Walmart and Target are leading the race, but Amazon continues to innovate in order to compete and they are now available in 18 markets worldwide. Their Amazon Fresh service, which was introduced back in 2007, costs roughly $14.99 per month and is only available to the Amazon Prime members (a membership that costs about $99 per year). Amazon finds the grocery delivery service to be a very attractive space at the moment and they are going to continue moving in that direction. And it could lead to the introduction of hundreds (or even thousands) of brick-and-mortar Amazon grocery pick-up venues that would need to be established in order to meet the growing demand.

This summer, Amazon started experimenting with its own “click and collect” grocery model, taking a page out of Walmart's book. The service has consumers simply drive-up to the location and have all of their grocery items placed into their vehicle within minutes. It's reported that they've been testing it out in California and Washington.

Walmart offers its click-and-collect service for free to its customers and it's available to be picked up on the same day, between the hours of 7am to 11pm. Other delivery services can sometimes charge over $10 for the items to be delivered to your home, but those who value the convenience of not having to leave their home are going to be willing to pay for it. This model of curbside pickup has worked out really well for Walmart so it's no surprise that Amazon might want to introduce something similar.

There are many other grocery delivery services in the market at the moment, like FreshDirect, Peapod, Spud, New Roots Organics, Dandelion Organic, The Organic Box, Urban Harvest, Good Eggs, Kale Cart, Pink Dot, Farmbox, and many others.

Despite the interest of these companies to try and meet the needs of customers and save time by having their food shopping done with convenience however, many people still haven't warmed-up to doing their grocery shopping this way yet. According to a Food and Beverage study from TAB Analytics that was conducted this year, the shopping interest has declined from 16 percent in 2015 to 11 percent in 2016. Consumers site a number of reasons for not wanting to get on-board with the online grocery service, like wanting to be able to inspect and see the food beforehand or they simply enjoy and want to continue engaging in the brick-and-mortar shopping experience.

Pics:
GeekWire
Giphy
Simon Dawson/Getty Images (Global News)
Business Insider/ Cowen & Co.
Forbes
Sources:
http://www.businessinsider.com/amazon-fresh-grocery-key-part-of-the-business-2016-10
http://www.zdnet.com/article/walmarts-online-grocery-services-drive-e-commerce-growth-strategy/
http://www.laweekly.com/restaurants/12-great-la-grocery-delivery-services-for-when-youre-too-busy-or-lazy-to-shop-4895408
http://globalnews.ca/news/1623859/online-grocery-shopping-canada-loblaw-walmart-canada-amazon-ca-metro-sobeys-ecommerce/
http://www.forbes.com/sites/bryanpearson/2016/10/28/how-to-improve-online-grocery-learning-from-kroger-walmart/#63d37c112f40
http://qz.com/766593/for-once-amazon-is-taking-a-page-from-walmarts-playbook/
http://cdn2.hubspot.net/hubfs/544043/2016_Webinars/Food_Beverage_Consumables_Webinar/White_Paper/4th_Annual_Food_and_Beverage_Consumable_Study.pdf?t=1476820089888