Amazon.com Inc. announced today it has added a curbside pickup option for Amazon Prime members ordering groceries through its Prime Now service and Whole Foods.
This new service means Amazon now offers consumers two options to order and get their Whole Foods groceries. In February, Amazon began offering Prime Now delivery of Whole Foods grocery items in four metropolitan markets. As of the end of June, this service had been rolled out to 19 markets. Amazon acquired Whole Foods last year for $13.7 billion.
Prime members in Virginia Beach, Virginia, and Sacramento, California, can now buy Whole Foods groceries through Amazon’s Prime Now service and pick them up curbside at local Whole Foods supermarkets in 30 minutes. A consumer is charged a $4.99 fee if pickup is wanted in 30 minutes, but there’s no charge if their pickup is planned an hour or more from the time the consumer places his order. The minimum order required is $35. Amazon says it will add the pickup option to more markets in the coming months.
If a Prime member chooses the home delivery route, there is a $7.99 fee for delivery in an hour or less, or no charge if delivery can take up to two hours. Both pickup and delivery options are available from 8 a.m. to 10 p.m.
Sales from Amazon’s physical store operations accounted for 8.1% of Amazon’s revenue during the second quarter of 2018. These sales are primarily from Whole Foods, but also include sales from 16 Amazon Books stores (two more are in development) and from Amazon pop-up stores.
The curbside pickup option adds a second dimension to Amazon’s Whole Foods e-grocery service, putting it in line with e-grocery services offered by Walmart Inc., the largest grocer in the United States. Walmart expanded curbside pickup of groceries ordered online from 900 locations in 2017 to 1,200 locations today. Walmart is also adding a home delivery service of perishable groceries and says it will be available in 100 metropolitan areas by the end of this year.
According to a July Internet Retailer consumer survey conducted by BizRate Insights, 6% of consumers say they order groceries online regularly. 14% say they’ve ordered groceries online a few times, and 80% say they have not ordered groceries online.
While the vast majority of grocery sales happen in stores, online grocery is expected to catch fire. By 2015, as many as 70% of U.S. consumers will be buying at least some groceries online and those purchases will total more than $100 billion, according to a February 2017 report from the Food Marketing Institute and The Nielsen Co.
Plenty of retailers are trying to get in on that growth. Kroger Co., the second-largest grocer in the United States by sales, launched Kroger Ship, a direct-to-consumer e-commerce platform that will deliver non-perishable grocery items. The service is initially available in four markets—Cincinnati, Houston, Louisville, Kentucky, and Nashville, Kentucky—although the grocer expects to roll it out to more markets over the next few months.
Kroger is No. 86 in the Internet Retailer 2018 Top 1000. Amazon is No. 1 and Walmart is No. 3.
For more information on Amazon Prime and Amazon Prime Day, check out the 2018 Amazon Report. The report is available for download to Digital Commerce 360 Gold and Platinum members. Single-copy sales are also available.
James Melton contributed to this report.