Today, Amazon announced that it wouldn’t charge prime members a monthly fee for Amazon Fresh. That is, you will need to only pay for the prime, and this will itself let you use the Amazon Fresh for entirely free of cost. Currently, Amazon is charging $12.99 for prime that is $119 annually, and now it says that the additional $14.99 need not have to be paid for the Amazon Fresh subscription.
The company announced that the prime users get Amazon Fresh and Whole Foods Market grocery deliveries free of charge. By this announcement, existing subscribers of Amazon Fresh and Whole Food delivery customers can now use the service completely free of cost with free delivery. But the Prime members who will be signing up to Amazon Fresh from now on will have to wait for invitation. Amazon statement regarding the waitlist, “Given the rapid growth of grocery delivery we expect this will be a popular benefit”.
Stephenie Landry, the Vice President of Grocery Delivery, said, “Prime members love the convenience of free grocery delivery on Amazon, which is why we’ve made Amazon Fresh a free benefit of Prime, saving customers $14.99 per month”. He added, “Grocery delivery is one of the fastest-growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits”.Source
With this announcement, Amazon will likely turn into more of a tough competitor to Instacart, Walmart, and many other leading grocery delivery services. In June, Walmart announced its unlimited grocery delivery service, which costs $12.95 a month and $98 a year.
But, the announcement of Amazon is going to be a major threat to Instacart. This is because, according to Second Measure, half of the customers of Instacart also had a membership of Amazon Prime. Regarding the no fees for Amazon Fresh, Stephenie Landry says, “Amazon has never been afraid to invest in the things that customers love”.
Moreover, Amazon prime is a bit expensive compared to other online grocery shops. But we can consider it, as it will provide us with many services which include Prime Video, Twitch Prime and Prime Music and now even free grocery delivery. Amazon Fresh is available in nearly 2000 cities in the US.
But according to Vox, there is a criterion for free delivery, which is, orders above $35 are only eligible for free delivery in many places. And in New York City alone, orders above $50 are eligible for free delivery. Also, Amazon is giving one and two-hour delivery options for users. This makes the local Whole Foods inventory available online and in the Amazon app.
Amazon Fresh launched in 2007 in Seattle, but the company could not develop it as it couldn’t find itself a stable market for nearly five years. This is because Amazon stocks the groceries on its own warehouse and then only delivers the goods to the customers either on the same day or the next day.
In the last year’s report, it is said that Amazon handled one-third of the grocery delivery in the US. Amazon bought Whole Foods, which cost $14 billion in 2017. With this addition, reports taken early this year say that the growth of Amazon’s grocery shopping was slowing. So Amazon made a classic move by not charging for the subscription and giving free deliveries.