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Amazon is testing a 2-hour grocery delivery service from Whole Foods



Whole FoodsAP/Mark
Lennihan

  • Whole Foods and Amazon
    are testing a service that provides two-hour delivery directly
    from Whole Foods stores.
  • It’s part of Amazon’s efforts to sell more grocery
    items online and expand its Prime Now two-hour delivery
    service.

 

Amazon and its subsidiary Whole Foods have started a trial
program in four cites around the country to deliver groceries and
other goods directly from Whole Foods. The trial is starting in
Austin, Texas; Cincinnati, Ohio; Dallas, Texas; and Virginia
Beach, Virginia.

Amazon said in a press release that it plans to roll the program
out to more cities later in the year.

“This is where we’re starting,” Stephenie Landry, vice president
of Prime Now,
told the Seattle Times
. “We’re going to be expanding.”

The program is available exclusively for Amazon Prime members
through the Prime Now two-hour delivery service. Delivery is free
as long as the order size is over $35, and customers use
PrimeNow.com or the Prime Now app to order.

Here’s the idea: instead of stocking Whole Foods groceries in a
warehouse and starting Prime Now deliveries from there, the new
program uses a Whole Foods store as a depot.

Whole Foods’ private-label brand, Everyday Value 365, is already
available on Prime Now delivery in some markets, including New
York. This program will have a wide selection of Whole Foods
items on offer — conceivably, nearly the whole store could be
stuffed into a Prime Now bag. It’ll include “the vast
majority of things that people buy most frequently,” Landry
said.

That includes items like fresh produce, seafood, meat,
flowers, baked goods, and dairy products.

A move like this was expected by industry experts.
Buying data shows
that Whole Foods’ brand is one of Amazon’s
strongest weapons as it tries to take a bigger piece of the
grocery pie. Amazon also realigned its Prime Now and Amazon Fresh
divisions under the leadership of Landry at the end of
2017.


A 2017 Morgan Stanley survey

 of Prime members
shows that Prime Now grocery orders are up. The bank wrote in a
note to investors that 48% of people using Prime Now are ordering
grocery items with it — more than they are ordering more
traditional e-commerce offerings. 

The survey was done prior to the Whole Foods acquisition’s
close and before its products were put on Amazon, so it’s
possible that adoption has increased even more.

It’s tempting to look at Prime Now as Amazon’s vehicle for
dominating grocery, an area where it’s struggled previously.
Combining Whole Foods’ nationwide grocery footprint and selection
with Prime Now’s delivery logistics to provide free, two-hour
delivery could prove an unbeatable combination.

Some Whole Foods stores already offered delivery through a
partnership with Instacart. It’s unclear if that partnership will
continue.



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