Amazon is planning to test the waters with an old idea; the online grocery store!
Amazon.com hasn’t been a pure bookstore for a very long time. After expanding into fields like music and movies, the company added everything under the sun, from computer hardware and car batteries to treadmills and salt cellars, and now the company has taken yet another step towards one-stop-shopping nirvana: groceries.
If online grocery shopping gives you flashbacks to failed experiments like Webvan, you are not alone. But there are important differences between the Amazon model and the failed early dot-com grocers. Webvan built and stocked its own warehouses, from which it then delivered goods in vans, to a decidedly local delivery area. The company eventually collapsed under the cost of running all of this single-handedly, without relying on existing grocery chains to help keeping the supply lines stocked.
Amazon is facing a slightly different situation, as the company already has a chain of warehouses across the country. Focusing on nonperishables like peanut butter, potato chips, and canned soup means that there’s no refrigeration required—ordinary warehouse shelves will do fine. Amazon will ship these things out the same way they ship everything else, through established shipping services like FedEx or UPS, so there’s really no change in the infrastructure other than stocking a few thousand new products. And when appropriate, your order may be shipped directly from the manufacturer to your door without ever treading Amazon ground. From a business standpoint, it all makes perfect sense, and it looks like Amazon is going about it exactly the right way.
So what does the new neighborhood grocer stock? A stroll down the virtual aisles shows mostly Costco-sized packages of everything—22-packs of Biscuick mixes, 5 pounds of Happy-Cola Gummi Candy, and the like—with the occasional boutique item thrown in. All of these items qualify for free economy shipping, which isn’t always the case for the existing Gourmet Foods section, and if you sign up for the Amazon Prime preferred shopper program, you get discounts on faster shipping as well. Add that up, and this store could actually be a decent option for stocking up on cereals and baby food.
On the other hand, the selection is impressive but still a bit limited. If you want crunchy peanut butter, it’s a Gourmet item and shipping will cost ya. Among 146 varieties of ground or whole-bean coffee, there’s not a single Guatemalan offering, and if you want a case of energy drinks, say hello to HOOAH! Soldier Fuel and Pimpjuice, because Monster and Red Bull are nowhere to be found. Anything vaguely Scandinavian shows up in the Swedish cuisine category, making it hard to find the real goods. As for pricing, you’re usually better off at your local Sam’s Club or BJ’s, though that might change if you factor in the cost of gas.
Overall it looks like Amazon Groceries may earn a few pennies of some family dollars, and it does make a never-outdoors life slightly easier to achieve. If the feature finds some traction in the market, it’s not hard to imagine a nationwide Webvan 2.0 operation in the future, riding on Amazon’s infrastructure and pushing the old-fashioned country store concept further into Hades.