- AmazonFresh has expanded its online grocery service to Denver, according to the Denver Post. In addition to its lineup of fresh produce, meat, seafood and household goods, Amazon has also partnered with local markets, including Pacific Ocean Marketplace and St. Kilian’s Cheese Shop.
- This is one of numerous moves Amazon has made in the Denver area recently. Last year, the company opened a sorting facility in Aurora, and later this year it will open a 1 million-square-foot warehouse in the city.
- This is a potentially difficult market for Amazon, considering chain retailers such as Safeway and King Soopers already deliver groceries in the city. Third-party e-commerce services like Instacart and Door to Door organics have also made inroads with local retailers.
AmazonFresh has expanded very slowly since it launched a decade ago, but the service could be picking up steam. After a quiet period of more than a year, the platform launched in Dallas, Chicago, and Boston last June. The company also dropped the price of AmazonFresh from $299 per year to $14.99 per month, plus a free month-long trial.
In addition to its domestic expansion, Amazon has taken its grocery delivery service abroad. Londoners gained access to AmazonFresh last summer, and this year it’s expanded to parts of Tokyo, Berlin and Potsdam.
Denver becomes the sixteenth market for AmazonFresh. And like every other city where the service touches down, competition is fierce. Along with its many natural markets and co-ops, the Mile High City is also home to mainstream grocery chains that already offer home delivery.
But Amazon’s strategy has never been about being first to market. It’s more focused on getting the rollout right, and then nudging its many customers, including millions of Prime members, onto the Fresh platform. Local infrastructure investments could help the e-commerce giant offer greater variety and quality of products, and its partnerships with merchants like Pacific Ocean Marketplace give it local credibility.
These partnerships present an interesting dilemma for retailers, since Amazon is a service provider as well as a competitor in the space. The benefits for both parties are clear: Amazon gets access to loyal customers, while retailers get world-class ordering and delivery. But is it a case of letting the wolf into the hen house, so to speak? Amazon has also signed up retailers through its Prime Now service, including Sprouts Farmers Market and New Seasons Market.
It’s unclear how retail partnerships will break down between Prime Now and Fresh as both services continue to expand. Right now, it seems Fresh is more focused on specialty retailers like meat shops and cheese purveyors, while Prime Now focuses more on grocery retailers. This is something worth watching, particularly as third-party competitors like Instacart and Shipt continue to expand their reach.
In addition to its Fresh expansion, Amazon is building other grocery-focused formats, including its checkout-free Go store, which is experiencing technical difficulties, and a Fresh Pickup click-and-collect concept, which just opened for business yesterday in Seattle. The company’s interest in the $600 billion grocery market is clear, but slow, steady growth may be a tough way to gain share in the crowded, quickly evolving food retail space.