What can’t you buy from Amazon?
Amazon is planning to expand its online grocery store Amazon Fresh to urban areas across the US, and possibly outside the country as well. According to Tech Crunch, Amazon Fresh must pass its final test in Los Angeles and San Francisco. Amazon Fresh has been delivering fresh produce and groceries in Seattle for five years. According to Reuters, if all goes well in California, then Amazon will extend its grocery store in 20 more urban areas across the US, and possibly outside the country as well in 2014.
Amazon said they wanted to enter a new market, and the grocery sector may prove to be a tough task. CBC pointed out that online grocers have not fared so well historically. One example CBC gave was HomeGrocers.com, which was bought by Webvan in 2000, but never caught on. Tech Crunch listed inventory costs, spoilage, and “delivery complications” as major obstacles that made life difficult for previous online grocery stores.
If Amazon Fresh does catch on, then stores like Wal-Mart, Albertsons, and Hy-Vee need to be very worried. According to Reuters, the grocery industry generated $568 billion in retail sales in 2012. If Amazon eclipses their competition, there won’t be enough money to go around. Netflix ran video stores out of business, and Amazon could do the same to grocery stores. CNET said Amazon could also take revenue away from delivery services like UPS, since they use their own trucks. Amazon Fresh would revolutionize the way we do grocery shopping, but may cost people their jobs.
Before anyone could worry about anything, internet grocery analyst Bill Bishop said Amazon Fresh needs to take care of business in California. Bishop told the Seattle Times, “It’s going to be a two-step process. The first two California markets will tell them whether they can roll out it elsewhere. I think Seattle’s too close to home. They really need a clean-slate test, and they’ll get that with this.”
