Amazon is debuting drive-up grocery (WFM, AMZN)

This story was delivered to Business Insider Intelligence ” E-Commerce Briefing ” subscribers hours before appearing on Business Insider. To be the first to know, please click here .

Amazon has announced that Prime members can now order groceries from Whole Foods and pick them up without having to leave their cars, CNBC reports . Users order from the Prime Now app, drive to the designated Whole Foods store, park in a reserved spot, and an employee will bring the groceries out to the car.

Reasons for Not Using Online Grocery Delivery
Business Insider Intelligence

Orders of $35 or more can be picked up in as little as 30 minutes for a $4.99 charge. The service will be debuted in Sacramento, California and Virginia Beach, Virginia, and the e-commerce giant plans to expand the service to more cities later in the year.

Curbside pickup is the e-tailer’s latest move to boost its omnichannel grocery offerings. Amazon has recently been upgrading the way it offers fresh products to customers through Whole Foods. It announced that it would be expanding Whole Foods grocery delivery through Prime Now to select areas in Florida and New York City last month.

It also recently debuted an Alexa feature that allows Prime members who have an Echo device and live where Prime Now Whole Foods delivery is available to use those devices to shop for groceries with their voice. These efforts, combined with the new curbside service, add up to an aggressive play to increase Amazon’s piece of the online grocery market, which could grow to be worth as much as $100 billion by 2022, according to estimates from FMI and Nielsen.

The new service will compete alongside curbside grocery offerings from major competitors like Walmart and Target. Amazon is not the first player in the grocery market to offer drive-up options for pickup. Walmart has already rolled out same-day grocery pickup with a curbside option to select cities in the majority of the US.

Target also offers a drive-up grocery pickup service that’s available in 800 stores across 25 states, and the retailer announced last month that the number of participating stores will hit 1,000 by the holidays. As Amazon looks to expand its drive-up service, it will have to compete with these established players to provide the best user experience, but it may benefit from having a somewhat different image and clientele than these mass merchants.

Entering the curbside pickup market alongside stiff competition will put Whole Foods’ reputation for high quality to the test. For consumers, the largest barrier to online grocery shopping is a desire to see and select their own goods, especially produce.

Whole Foods’ reputation for consistently high-quality products, however, might help assuage these fears and give Amazon’s curbside pickup efforts an edge over competitors’ by bringing in customers who have more faith in Whole Foods than other grocers. If this is the case, Amazon may need to pay particular attention to its suppliers in the future to avoid alienating them and losing access to the premium goods they provide.

To receive stories like this one directly to your inbox every morning, sign up for the E-Commerce Briefing newsletter. Click here to learn more about how you can gain risk-free access today.

Powered by WPeMatico