Amazon Launches Grocery Delivery via Whole Foods

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Amazon Launches Grocery Delivery via Whole Foods

By Randy Hofbauer - 02/08/2018

Amazon has launched free two-hour delivery from Whole Foods Market stores via its Prime Now service, beginning in select markets and expanding across the country through the rest of the year.

Beginning today, members of the Seattle-based company’s Prime subscription program in neighborhoods of Austin, Texas; Cincinnati; Dallas; and Virginia Beach, Va., can shop Prime Now for thousands of items across fresh and organic produce, bakery, dairy, meat and seafood, floral, everyday staples and select alcohol products from Whole Foods available for free two-hour delivery. Prime members receive two-hour delivery free and ultra-fast delivery within one hour for $7.99 on orders of $35 or more.

“We're happy to bring our customers the convenience of free two-hour delivery through Prime Now and access to thousands of natural and organic groceries and locally sourced favorites,” said John Mackey, co-founder and CEO of Austin-based Whole Foods Market. “Together, we have already lowered prices on many items, and this offering makes Prime customers’ lives even easier.”

Delivery is available daily from 8 a.m. to 10 p.m. Customers can order through www.primenow.com or via the Prime Now mobile app, available on iOS and Android devices.

Bricks Meet Clicks

Also signaling Amazon’s decision to start getting serious about integrating its clicks with bricks, VP of Amazon Prime and Delivery Experience Greg Greeley is planning to spend more time working with the Whole Foods team to focus on the two companies integration, CNBC has reported. He will primarily focus on making Amazon Prime a major part of Whole Foods’ customer rewards program.

Neil Lindsay, Amazon’s VP of worldwide marketing, will take on most of Greeley’s responsibilities at Prime, the news site added. The moves suggest that Amazon will make Prime a central part of the Whole Foods customer rewards program.

Groceries already can be ordered from Whole Foods through certain third-party delivery services such as Instacart, though the relationships here are uncertain moving forward. What is clear, however, is that Amazon is taking full control over the end-to-end customer experience, said Andrew Park, senior director, CX Strategy at Salt Lake City-based customer experience management company InMoment.

“This gives them a big leg up over other delivery providers that often experience a disconnect between their services and the source stores,” he noted. “Brick-and-mortar grocery brands have attempted to launch their own delivery programs, but Prime's proven ability to execute consistently could be the tipping point to the adoption of online grocery.”

Walker Sands’ 2017 Future of Retail data currently shows that only 16 percent of consumers have purchased groceries on Amazon last year. However, this number could spike with the rollout of nationwide delivery: Consumers say they would purchase more groceries online if the process was less expensive (40 percent) and if delivery times were more convenient (23 percent). Amazon’s price cuts at Whole Foods coupled with fast delivery options via Prime Now addresses those barriers.

And the move supports the idea that the network of Whole Foods stores is a great way to not just deliver fresh food, but also – through the use of Prime Now – use stores as distribution centers for other common Prime Now products, said Greg Ng, VP of digital engagement at Raleigh, N.C.-based software firm PointSource, a Globant company. One of the more exciting things he sees is the potential of adding Alexa-enabled appliances to the mix, as well as Amazon Key smartlocks.

“The addition of AI into the analyzation of food usage patterns can mean huge things along the supply chain,” he said. “In theory, fewer product go bad sitting unpurchased in the store shelves or uneaten in your fridge.”

And as the lines between online and in-store have blurred, Amazon has learned that location will be a key driver for success. According to Dan Wilkinson, CCO of Chicago-based product information network 1WorldSync, the ability to deliver products consumers demand as quickly and conveniently as possible will be a major competitive advantage – but it also will require significant adjustment for its logistics operations.

However, Amazon has long been one to embrace trial-and-error – and learn from those mistakes. Especially with one of its most noteworthy recent projects, the Amazon Go cashierless convenience store, whose public delay lasted 10 months while the ecommerce giant learned from errors and adjusted accordingly.

“As we recently saw with Amazon Go, Amazon is always looking for ways to add new seamless experiences to engage customers and this is another perfect example of how they're doing so, while streamlining the delivery of perishable goods,” said Scott Webb, president of Chicago-based digital solutions provider Avionos. “Over the next few months, we can expect to see Amazon employ their test and learn philosophy to see how this new addition of services impacts their customers and how they can continue to refine and improve that process.”