Amazon Fresh: Big Radish or Bad Kiwi?

May 8, 2014

Marketplaces Kevin McCarthy By Kevin McCarthy

Earlier this week, we brought you news of Amazon Prime Pantry. Here, guest blogger Kevin McCarthy explores a similar Amazon service, Amazon Fresh, which has been up and running locally in Seattle, San Francisco and Los Angeles.

I’ve been a big fan of home delivery of grocery and convenience products for a long time, first as a Kozmo customer, then Webvan/HomeGrocer, and in the modern era, Safeway.com and Amazon Fresh. In this post, I’ll take you through how Amazon Fresh works — with a focus on its home market, my hometown of Seattle.

Amazon Fresh is currently available in Seattle, San Francisco, and Los Angeles. The programs offered in each market are pretty dramatically different, but here they are at a glance:

Seattle: Anyone can place an order and pay a delivery fee. There appears to be no tie-in with the Amazon Prime program. Delivery fees range between $7.99 and $9.99.

  • If you spend $300 in any calendar month, you achieve “Big Radish” status, which means that deliveries on orders of $50 or more are free each time.Big Radish
  • You can apparently also include “normal” e-commerce items in your cart, but they have to be purchased (somewhat confusingly) through the Fresh website, which includes product pages similar to the ones you’d find on Amazon’s main site — but still different.     

San Francisco/Los Angeles: In a completely different business model, after a free trial, you have to pay $299 each year for an Amazon Prime Fresh membership. It’s like a normal Prime membership that comes with free same-day and scheduled delivery of all orders over $35. If there’s anyone who has experienced the California version of Amazon Fresh, I’d be curious to get your take in the comments.

The Experience

I really like the Amazon Fresh experience. Think of it as a high-end food-delivery service that also offers groceries. In Seattle, Amazon Fresh has partnered with a ton of high-end local foodie-type shops, including Top Pot Donuts, DeLaurenti Specialty Food and Wine, Eltana Bagels, Hot Cakes Molten Chocolate Cakery, Blue Streak Chocolates and literally dozens of other merchants.

Before Amazon Fresh, if I wanted a bagel from Eltana, I’d have to drive five miles in tons of traffic and spend my $3 for a bagel. Now, often with less than 24 hours’ notice, I can order from any of these tasty merchants and have my order delivered to my house the next day. There isn’t a delivery charge, per se, for any individual merchant. I just pay the delivery fee for the entire order to Amazon, or once I’ve achieved Big Radish status, I get free delivery for 30 to 60 days on every order over $50.

One thing that’s interesting to me is that when you order from many merchants in a single Amazon Fresh order, they charge your credit card for many individual purchases, as shown below:

Amazon Fresh bill

I’m not sure why they do that, but as a consumer it’s a little confusing, and tough, to add up the totals to verify my order.

Delivery

You can schedule delivery to be attended or unattended (meaning you will or will not be present). Your delivery will arrive on your doorstep, and even frozen food is rated to stay good for at least an hour. Each bag is incredibly well insulated and contains frozen pouches to maintain a cool temperature.

I know one person who had a “predawn unattended” delivery and then had their groceries stolen. This was in a very quiet semi-suburban neighborhood. I’m guessing that some thieves must drive around searching for these pre-dawn deliveries? Or maybe they’re tailing Amazon Fresh trucks? Either way, this might be a larger problem eventually. Amazon paid for the whole order for my friend, which was good customer service.

Here’s a look at the delivery bags, which as you can see are hardly conspicuous:

Amazon Fresh bags

Delivery has also been amazingly prompt — seriously, unbelievably so. For a scheduled 7-8 p.m. delivery, they have shown up three times in a row now exactly at 7 p.m. They must be parking up the street and counting down the seconds until they’re supposed to arrive.

Amazon Fresh salami

Once you unpack your goods, you get some really nice treats. Because you’re shopping at higher-end places, you get whatever level of service the local merchant originally offers. In the case of DeLaurenti, they wrap rows of salami in wax paper, seal the package up in cling wrap, and wrap it in butcher paper.

Most recently, I got a few not-so-tasty treats, too. A bad kiwi and a partially opened yogurt were delivered to me. In Amazon’s defense, this was the first time anything like this has happened to me, but here’s the evidence:

Amazon Fresh kiwi     Amazon Fresh yogurt

Costs

A GeekWire review of Amazon Fresh prices in Seattle estimated certain items to be about 10% higher than a local Fred Meyer store (similar to a Super Walmart). My experience has been roughly the same. I think you’re going to find more shoppers looking to Amazon Fresh for convenience rather than savings.

Personally, I think it’s an amazing service, chock full of innovation, and could lead to a huge nationwide business for Amazon, while also broadening  the company’s home-delivery network to include thousands or tens of thousands of new merchants. I think it’s more of a Big Radish than a bad kiwi.

 

Blog post by Kevin McCarthy, a former ChannelAdvisor employee and currently the founder of McCarthy Music.