Four cities this week have been treated to Amazon's test of their new Whole Foods Delivery service. This free service for Prime members will be an excellent test market for the service as each city has its own culture, transportation issues, and demographic. Amazon purchased the organic foods giant a few years ago, a move that many people felt was not aligned with their brand. What it managed to accomplish for Amazon was the development of the online giant into the 5th largest grocery retailer in the United States and made many of the largest grocery chains start to rethink their business model. Grocery has always has very thin margins so Amazon's move to two hour free delivery is a bold one. However, I have faith in Amazon. It has been a model for business scalability.
Amazon has accomplished what Walmart managed to accomplish in the 80s-90's through careful, strategic moves. They didn't look to "disrupt the industry". Amazon flew in under the radar and proceeded its rise to the top by slowly rolling out new categories and options based not on what they believed their customers wanted but by knowing what they want and also understanding what they don't want. Customers want convenience, they don't want to bother with parking and carrying packages. Not anymore. This is why the purchase of brick and mortar stores -at first- seemed out of place for the company. Why would an online retailer with a brand known for low prices and convenience buy a high end grocery chain?
Because they figured out a way to make the delivery of high end groceries affordable.
I look forward to seeing how the test cities go, and not just because I like to observe Amazon. I am a fan of Whole Foods and free two hour delivery is right up my alley. Whatever happens with Amazon's new venture I am certain they will be smart about the rollout of this feature, if it rolls out.