Amazon expands Fresh stores and delivery options amid post-pandemic online grocery customer uptick

By Mary Ellen Shoup contact

- Last updated on GMT

Photo Credit: Amazon
Photo Credit: Amazon

Related tags: Amazon, Amazon fresh, grocery delivery

Amazon is continuing to expand its grocery business, opening four new Amazon Fresh grocery stores in the US (two in Illinois and two in California) while offering enhanced delivery and payment options to customers including expanded Key In-Garage Grocery Delivery and Amazon Contactless Payment.

For its North America segment which includes all retail areas of the business, Amazon's Q1 2021 net sales declined from Q4 2020, $75.35m to $64.36m, but registered a 40% year-over-year increase from Q1 2020.

Olsavsky noted that customer adoption of its grocery offerings has been picking up since the company added Amazon Fresh as a free Prime benefit.  

According to a recent Brick Meets Click/Mercatus Grocery Shopping Survey​ (fielded March 26-28, 2021), total US online grocery sales hit $9.3bn for the month of March 2021 -- up 43% year-over-year as 69 million household placed an average of 2.8 online orders during the month. 

“Grocery has been a great revelation during the post-pandemic period here. I think people really value the ability to get home delivery. And we've seen that as numbers go up considerably pre- and post-pandemic,”​ said Amazon SVP and CFO, Brian Olsavsky, said during the company’s Q1 2021 earnings call with investors.

Amazon announced that millions of Prime members now have access to Key In-Garage Grocery Delivery – where groceries are delivered directly to consumers’ home garages –  in more than 5,000 cities and towns in the US, enabling free, contactless, and secure in-garage delivery of grocery orders from Whole Foods Market and Amazon Fresh.

Additionally, Amazon One—a fast, convenient, contactless way for people to use their palm to enter, identify, and pay—launched as a payment option at Whole Foods Market, starting with the Madison Broadway store in Seattle. Amazon One will be added as a payment option at additional Whole Foods Market stores in the Seattle area in the coming months.

Amazon Fresh grocery stores

Its latest endeavor, Amazon Fresh grocery stores (introduced in August 2020), offer consumers same-day delivery and pickup direct from dedicated Amazon storefronts. Customers can also shop in-store and select from a wide assortment of national brands across fresh food categories including produce, meat, seafood, and prepared meals created by Amazon’s culinary team, as well as Amazon’s new private label brand, Aplenty.

AmazonAplentyProducts

Launched earlier this month, Amazon’s Aplenty brand (sold online and at Amazon Fresh grocery stores), is the company’s newest private label offering of snacks, condiments, and canned goods.

Similar to Amazon Go stores, Amazon Fresh locations are powered by the company’s Just Walk Out technology, which eliminates checkout lines by detecting what products shoppers pick up or return to shelves (customers must provide a credit card upon entry), allowing customers to enter and leave with their chosen products.

Operating in 15 locations around the world (including three stores in London), Amazon Fresh grocery stores added four new communities to its footprint in 2021 – Oak Lawn, Illinois; Bloomingdale, Illinois; Fullerton, California; and Long Beach, California – with additional locations opening in New Jersey and Seattle Washington, said Dave Fildes, Amazon director of investor relations.

Amazon Fresh stores have created hundreds of regular full- and part-time jobs in each community with starting wages of at least $15 per hour and comprehensive benefits, said Amazon.

“The stores themselves, we're confident that the Just Walk Out technology that will be a boon -- a benefit to customers. And we're very excited about what's in the works, but that's still really early in day 1,”​ noted Olsavsky.

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