AmazonFresh, the distribution giant’s same-day delivery for groceries including fresh produce, is now available in some Inland areas, according to emails received early Friday Oct. 2 by Amazon Prime customers.
The announcement puts another player into the roiling marketplace of Inland grocery sales and adds another local presence for Amazon, which has warehouses and distribution centers in San Bernardino, Redlands and Moreno Valley.
The cost of the service, $299 annually, may be a challenge for Inland customers who will judge the convenience against quality, reliability and refundability for products that consumers like to pick up and inspect before buying.
AmazonFresh says it can put bring a grocery order to the front door by dinnertime for orders placed by 10 a.m., or breakfast for orders placed by 10 p.m.
“I won’t do that, not for that much,” said Benicia Mangram, 55, who lives in the Rancho Belago section of Moreno Valley.
‘That’s Too Much’
“$300 (a year) – that’s too much, that’s like $25 a month. That money can go for something else. It’s not that inconvenient for me to go to the store,” said Mangram, who said she is an Amazon Prime member who checks her “wish list” frequently for price changes.
Mangram, who works at UC Riverside as an administrative coordinator for the departments of creative writing and music, brought up another consumer hurdle: “And then I don’t know what kind of groceries they are offering.”
“Typically, people like to pick which particular tomato they will buy,” said Rami Zwick, a professor of marketing, and associate dean at UC Riverside.
But, he suggested, web merchants can overcome that hesitancy in the same way they convinced once-reluctant customers to buy shoes and clothes online.
“Today people are more experienced in purchasing online. They are more willing to buy clothes, without a second thought. I bet Amazon is willing to bet that consumers will be willing to purchase food online, with experience.
“I have a lot of trust in the research Amazon does before providing new services,” Zwick added.
The company “has a huge database on consumers … without knowing what it is that led them (to start AmazonFresh in the Inland area), I would assume it is based on the profiles they have of consumers in the area.”
He said the company has been characterized by “very generous consolation policy” for returns, and will likely use that “to teach customers to get comfortable with such a service.”
There’s a 30-day free trial called Prime Fresh, with free delivery for grocery orders more than $50.
Headed for $100 Billion
Sources for AmazonFresh foods include direct-from-the-manufacturer, farmers, food distributors and local artisans, according to Amazon. The company declined Friday to disclose what local suppliers might be involved for the Inland venture.
In addition to Amazon, Walmart offers same-day food delivery in some areas. Target announced in September that it plans to start online grocery deliveries.
Market-research firm Packaged Facts calculated that online grocery saleswas more than $23 billion in 2014, a 22 percent increase over 2013 – and that online grocery sales will reach $100 billion in 2019.
Started in 2007 in the Seattle area, AmazonFresh reached areas of Los Angeles and Orange County in 2013 and San Diego County in 2014.
Nationally, it also operates in Northern California and the New York metro and Philadelphia metro areas. AmazonFresh operates as a separate unit of Amazon, with a fleet of refrigerated delivery trucks.
The entry adds to a vigorous Inland grocery market scene, where the Chicago-based, low-price Aldi plans to introduce several Inland stores in 2016, as well as establish a warehouse and headquarters in Moreno Valley.
Sprouts Farmers Market planted Inland stores in 2009, Fresh & Easy came in 2007 and mostly went by spring 2015. Haggen Inc. filed for bankruptcy protection last month and said it was closing its California stores, including ones in Rancho Cucamonga, Chino Hills and Upland, after expansion plans failed.
Officials at Inland-based Stater Bros, which had more than $3.9 billion in sales in 2014, up 1.6 percent from 2013, declined comment Friday on the AmazonFresh announcement.
While companies are still emerging in the field, Packaged Facts market analysts said last year that four of the six outlets considered major players were online only – AmazonFresh, FreshDirect, Instacart and Peapod.
The other two were Safeway Inc. and The Schwan Food Co., a frozen foods maker.
Source: Press Enterprise