In a drastic move, Amazon has removed the USD14.99 monthly subscription fee to Prime members for its flagship online grocery delivery platform, Amazon Fresh. Launched in 2007, Fresh has been slow to expand as Amazon has struggled to economically roll out the full-basket delivery platform. Amazon’s estimated 100 million US Prime members will now gradually gain access to free two-hour grocery delivery from the minimum order threshold.
Amazon’s grocery offer has been providing a fragmented, less-than-ideal shopping experience to date, with Prime Now rapid deliveries from Whole Foods, Fresh’s utilization of warehouses and a larger-basket orientation, and shelf-stable focused programs like Prime pantry. With the elimination of the monthly Fresh fee, these programs will further integrate, tapping massive adoption potential in the face of competition from Walmart and Instacart with their strong strategic positioning.
Brands should utilize the move as an opportunity to have conversations with Amazon vendor managers around more strategic collaborative planning across the various business models. Additionally, product content and search placement within the Fresh silo of the site becomes significantly more critical due to the growth that will occur there. Earlier this year, Amazon launched sponsored products within Fresh, and brands should consider this one of the levers to pull.
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