Amazon Makes Strong Groceries Push

AmazonTote offers free home delivery, an attempt to increase its online sale of groceries and other goods.

January 27, 2011

NEW YORK — Online retailer Amazon.com is developing a weekly home delivery service in the U.S. " free of charge " that could support its intent to increase the online sales of groceries and other goods, the Financial Times reports.

The company has been testing the service, AmazonTote, since last summer in Seattle, and has begun recruiting staff for what will become a company-wide program.

In Seattle, AmazonTote has been offering customers free weekly home delivery, regardless of order value, on a specified day. The goods are delivered in reusable, weatherproof bags to the customer's designated address.

By not setting a minimum purchase size, Amazon said that it hopes to encourage customers to use its service as the main retail destination for regular household purchases.

Amazon has used the truck fleet that operates its pilot AmazonFresh grocery delivery service while testing AmazonTote.

Rich Tarrant, CEO of MyWebGrocer, a company providing online services to more than 100 regional supermarkets, believes AmazonTote could strengthen the company's long-term potential to challenge Walmart.

"Because of the frequency of grocery purchases ... you have an opportunity to be in front of the customer at least once a week ... By tying in that frequency with the ability to get everything else you want, you literally have created the virtual Walmart," he said.

Walmart has been developing an online strategy for groceries, using its stores as collection locations for online orders. It is also expanding a same day, in-store collection service for some online items, and has begun selling low-cost household goods such as detergent, toothpaste and some packaged foods.
Advertisement
Advertisement
Advertisement