Amazon has long been a pioneer when it comes to new methods of shopping. From Amazon Prime to Amazon Dash, it constantly works to find new avenues to deliver products into its customers' hands. However, when it comes to fresh food, Amazon has had to contend with traditional brick-and-mortar stores as customers are more likely to pick their meat, dairy and produce items by hand.
This could be changing quickly. Reports indicate that Amazon is building grocery pick-up locations in Seattle that are expected to open in 2016, according to a person familiar with the matter. Amazon is betting the pick-up locations will attract Millennial customers accustomed to online shopping as they enter their prime food-buying years, and the locations could also attract customers who still buy fresh food from brick-and-mortar retailers.
Grocery delivery is a tricky proposition when it comes to fresh food. Peapod, Royal Ahold's delivery service, took years to develop efficient ways of delivery meat and produce profitably to customer doorsteps. Instacart also found it difficult to effectively delivery perishables to its customers. Amazon's physical locations could be the key in unlocking this difficult market.
Amazon is facing issues on the delivery end, however, and most of it is not its fault. More than 54 million Americans are enrolled in Amazon's Prime service in 2016, up 10 million from 2013. Estimates note that it could swell to over 240 million by 2019. However, as more of the population enrolls in the "delivery all the time" market, current infrastructure is proving to be lacking.
More single-family homeowners are finding that old-fashioned mail slots and curbside mailboxes aren't up to the task of accepting drone delivery. Scott Frank, a spokesman with the American Institute of Architects, noted that while new delivery systems are gaining interest among architects, there hasn't been a coordinated effort to design homes in delivery-friendly ways. “We need to get with the times,” Frank said. The trend is inviting crime as well: according to InsuranceQuotes.com, some 23 million Americans reported incidents of package thefts from their homes.
Chris is a business writer and market analyst that focuses on the Markets, Legal and Washington sections of the Food Institute Report. In addition, he assists in compiling data for various Food Institute publications throughout the year. He invites you to contact him via email at email@example.com to talk about anything food-related.
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