AmazonFresh, the Amazon service that delivers fresh produce to your doorstep, has expanded past its infancy stage in Seattle. The online retailer added metropolitan Los Angeles as a delivery area on its website with very little pomp and circumstance on Wednesday, according to The Wall Street Journal.
Amazon has been running the AmazonFresh business within Seattle for six years now, offering customers produce, dairy, meat and boxed grocery goods through the swift swipe of a few keystrokes. Showing a willingness to take risks, Amazon is now expanding its venture into the grocery sales market-a market known for its thin margins and longstanding heavyweight participants.
In addition to competing with big box stores such as Wal-Mart Stores Inc., Kroger Co. and Safeway Inc., Amazon’s grocery service must also endure gaining territory over existing delivery services such as FreshDirect LLC and Peapod LLC which already have major claims in urban markets such as New York City, Chicago and Philadelphia.
In Seattle, Amazon customers are able to order their kale and cookies along with their kitchen appliances and car accessories. Surely, a marketable strategy. "Amazon really could use this as a means to drive sales of general merchandise, which may have better margins than groceries," said Matt Nemer, a Wells Fargo analyst. "That's what could really set them apart from the pure grocery delivery guys—they might not need to make a lot of money on the groceries themselves."
AmazonFresh also offers delivery of prepared foods, a facet of the program which Chris Porter of Seattle can attest to. Mr. Porter, the owner of A La Mode Pies, said he was selling more of his tasty tarts and colorful confections thanks to this aspect of AmazonFresh’s delivery service. Porter stated, "It's been great for my business.”
