Global e-commerce giant Amazon is reportedly planning to enter the rabid grocery wars between Coles, Woolworths and Aldi by launching its “AmazonFresh” home delivery service in Australia.
An Amazon insider told The New Daily that the company planned to start rolling out AmazonFresh in Australia “no later than 2017 to early 2018”.
AmazonFresh is a grocery and fresh food home delivery service which allows consumers to shop online and order for same-day delivery.
• IKEA announces new stores with a big difference
• Coles, Woolies slammed for lack of brand name milk
• Woolies, Coles using ‘tricks’ to sell home brand milk
• How ‘invasive JB Hi-Fi is changing its business
It launched in 2007 in Seattle and has expanded to five major US cities with plans to go global. On Thursday, BBC reported AmazonFresh would shortly be trialled in London.
AmazonFresh offers all the products you would find in a normal supermarket, at a comparable price to traditional outlets.
Categories offered in the US included: ‘grocery’ (fruit, vegetables, bread, cheese, eggs, meat, alcohol and milk etc), ‘household, baby, beauty, drugstore’ (medicine, grooming, oral care, pet care, etc) and ‘prepared foods’ (deli salads, meal kits, dips, platters, etc).
Customers order online and then request delivery, with same-day and early-morning delivery available. Delivery is free for orders of over $US50.
Similar startup services already exist in Australia. Two examples included Grocery Butler and Your Grocer. The two main supermarket chains, Coles and Woolworths, also offer home delivery.
In 2013, Reuters reported Amazon wanted to expand AmazonFresh throughout the US and internationally.
Reports that the service was set to open in Australia first surfaced when Amazon advertised for a Brisbane-based software developer to work on AmazonFresh, Business Insider reported.
“You will be responsible for building a system to support a new and confidential AmazonFresh initiative that will help revolutionise the grocery shopping experience,” the ad stated.
The New Daily contacted Amazon with questions about the service in Australia, but it refused to comment.
The catch with AmazonFresh
Consumers can only shop with AmazonFresh if they have an Amazon PrimeFresh membership. The membership costs $US299, after a 30-day free trial.
The PrimeFresh membership also includes Amazon Prime benefits like free two-day shipping in the Amazon store, unlimited movie and television streaming from Prime Video, Prime Music streaming and the ability to borrow books from the Kindle Owners’ Lending Library .
Existing Amazon Prime members can upgrade to PrimeFresh. In London, users will reportedly have to pay £6.99 (AU$13.62) a week for delivery, on top of the yearly fee.
No delivery or membership prices were available for Australia.
Queensland University of Technology retail expert Gary Mortimer told The New Daily that AmazonFresh’s yearly subscription would be worth it, so long as subscribers used the service regularly.
“It is a pretty tough nut to crack here in Australia [online groceries],” Dr Mortimer said.
“The buy-in for AmazonFresh will be taking products from small food retailers and delivering them to your house, therefore offering a much broader range.
“In the US it [AmazonFresh] offers close to 500,000 products and in the UK it’s about 130,000. That’s compared to the standard supermarket in Australia with 22,000 products.”
Dr Mortimer said online grocery shopping is rare for the Australian consumer, with only 12 per cent of grocery shoppers in the country using existing services.
The global average was 25 per cent and the Asia/Pacific average was 37 per cent, according to Nielsen statistics.