Wednesday, December 11, 2013

Amazon expands grocery business into San Francisco

Amazon officially entered the San Francisco grocery business recently, signaling that the company’s position in the perishable food market is more than just an experiment.

The ‘AmazonFresh’ grocery business touts more than 500,000 items that are available for delivery on the same day or early the next morning.* Free delivery is offered for orders that are $35 and up, and service is currently limited to just a few areas nationally.

Carlos Kirjner, an analyst from Bernstein Research, noted that consumer packaged goods, including perishable food, is a $222 billion per year potential opportunity for Amazon in the U.S. alone.* Several startups attempted to pull a similar service, but most failed to attract followings and overcome the high expense of delivering food to the masses.

Amazon announced earlier that its grocery service will be free for 30 days for those that are interested in testing out AmazonFresh. After the trial period ends, however, people will have to subscribe to a $299 per year service if they want to keep the grocery coming.

Many Brick and mortar businesses are struggling to stay afloat amidst the online-retail revolution.* Most non-perishable goods are now available for purchase online, but the grocery business still relies heavily on store-fronts for distribution.

No mothers would want to order a watermelon without first eyeing and tapping the surface to make sure it’s the ripest and sweetest one available.

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