This week, Amazon announced the expansion of its experiment in grocery delivery to Los Angeles. The bigger news, however, was the unveiling of a new version of the hugely popular Amazon Prime.
While the regular Prime gets you unlimited two-day shipping for $79 per year, Amazon’s Prime Fresh promises unlimited same-day or next-day early morning delivery of more than 500,000 items—including groceries—for $299 annually (minimum order $35).
If Amazon gets groceries right, the implications are far greater than another convenient option for buying your daily bread. Less than two decades after launching, Amazon could change our basic expectations once again about how we shop for everything. Getting just about any everyday product delivered the same day you place the order would shift from novelty to norm. As with the option to order online, the question would change from “Do you have same-day?” to “Why don’t you?”
But the radical nature of such a change also presents a radical challenge. Succeeding at groceries alters everything else because groceries are the toughest delivery problem to solve. Figure out the math on groceries and the ability to deliver nearly anything else on the same day—books, electronics, baby wipes—becomes a given. That’s because the logistics of grocery delivery are uniquely challenging, say supply chain experts. Amazon is rolling out its experiment in groceries slowly because getting them wrong risks a spike in customer mistrust that would undermine the company’s tightly tended reputation for unwavering competence.