How Amazon Fresh Works

Amazon Fresh is a grocery delivery service available to Amazon Prime members in select cities. Launched in Seattle in 2007, the service has expanded to major cities throughout the United States and select cities worldwide. Customers can choose from thousands of items, including produce, meat, seafood, snacks, and household essentials.

Understanding Amazon Fresh

Customers sign in to their Amazon Prime account or use the Fresh app to start shopping. They can choose unattended or attended delivery, and also designate a delivery time slot. With attended delivery, groceries are delivered in plastic bags and someone must be there to receive them. Unattended deliveries are dropped off at the customer's doorstep in temperature-controlled tote bags.

Individuals can also use Alexa—Amazon's cloud-based voice service—to help with their shopping. Users can verbally tell Alexa to add whatever they'd like to order to their Fresh cart. According to Amazon, the more you use Alexa to order your groceries the more helpful the system will become as it learns your preferences.

Last, customers can visit physical Amazon Fresh stores in select physical locations. The Amazon Dash Cart allows users to scan a QR code to sign in and begin shopping. Items placed in the cart are tracked, and payment is processed when you exit through the Amazon Dash Cart lane.

Amazon Fresh's Impact on Grocery Shopping

Amazon Fresh is not a new development—it was already up and running years before the COVID-19 pandemic forced people to stay home and need grocery delivery services. Since that time, many people have found it more convenient to shop for their groceries online and have them delivered.

Assistant Integration

Alexa integration enhances the shopping experience. First, customers can have the digital assistant's help in forming their list or obtaining information about products such as customer reviews. This type of technology integrates software applications with hardware devices levering the Internet of Things.

Alexa can save recipes and integrate ingredients into your lists. Then, as you shop for goods, you can obtain additional product information, obtain ingredient information, or have assistance findings goods in a physical store.

Grocery Lists

Historically, individuals would make static grocery lists using pen and paper. Now, you can interact with Alexa to help form your grocery list. Smart technology may also detect when you are low or out of specific goods. Then, you can interact with the Amazon app to review and go through the products, obtaining information about each good in advance of buying it.

Product Kiosks

Traditional grocery stores display large signage above each aisle to inform customers where certain products are at. At Amazon Fresh stores, customers can find Alexa kiosks located around the store to directly search for and obtain information on what aisle the goods are in. Often, grocery store retailers that do not own their own storefront must perform leasehold improvements to build out this signage.

Check-Out Process

The in-person shopping experience ends with individuals simply walking out of the store. Amazon Fresh has revolutionized the check-out process, no longer necessitating standing in long queues or interacting with another human as part of the exiting process.

Product Offering

With the acquisition of Whole Foods, Amazon Fresh now offers over 500,000 products from different brands. Ranging from organic, seasonal, and fresh goods, individuals truly can often have a one-stop shopping experience. This has revolutionized consumable shopping compared to traditional grocery stores with product quantity limitations based on the square footage of the store.

Amazon Fresh's Impact on Labor Markets

On the surface, Amazon's Just Walk Out technology will disrupt labor markets by no longer needing checkout lanes monitored by grocery store checkers. As customers simply "walk out" of the store to be billed upon their departure, Amazon Fresh store shave no need for product scanners. Customers also integrate their payment method to the Amazon app; there is no need to interact with a human to pay for the groceries.

On the other hand, Amazon Fresh introduces a new set of employment needs. Technicians must ensure the cameras on the ceilings and weight sensors on the shelves are working appropriately. Data scientists continue to push the envelope on the analytical capabilities of Alexa. Amazon Fresh grocery delivery shifts the labor from being a checker to being a puller that delivers the goods to the customer.

Even then, as Amazon experiments with equipment, drone, and automated selection and delivery services, workers will continue to be displaced as innovated solutions will warrant new, modern roles. Just as ATM proliferation impacted the banking industry, many financial professionals still retained their jobs (even though many roles have been directly impacted).

Amazon Fresh and Prices

Amazon's primary flagship store has built a reputation for having a wide variety of household products available for cheaper prices than many of its competitors. The company strives to have Amazon Fresh have a similar business model specifically geared towards consumable, food and beverage products.

There are several ways consumers can receive favorable prices when shopping at Amazon Fresh. Consumers can earn 5% back when paying with their Amazon Prime Rewards Visa Signature credit card. Consumers can also decide whether or not leave an optional tip. In addition, anecdotal shopping trips that detail the items purchased are similar to other grocery stores.

Where Does Amazon Fresh Deliver?

Amazon Fresh is available to Prime members in 42 cities across eight states and Washington D.C.: California, Illinois, New York, Maryland, Pennsylvania, Virginia, Washington, and New Jersey. Amazon Fresh has 18 stores in California, while it has multiple locations in Seattle. Amazon Fresh is also available in cities throughout the European Union: the UK, France, Germany, Spain, and Italy.

How Much Does Amazon Fresh Cost?

On Oct. 29, 2019, Amazon announced that Amazon Fresh would be free for Prime members in eligible regions of the United States. Prior to the change, Fresh cost $14.99 per month on top of the Prime membership fee.

In addition to eliminating the Fresh monthly membership fee in the U.S., Amazon combined the ordering sites for Amazon Fresh and Whole Foods Market, the grocery chain it acquired in 2017. Prime members also receive free delivery when ordering from Whole Foods.

In Germany, Prime members still have an additional monthly membership fee to use Fresh. However, in October 2019, Amazon reduced the fee for Fresh in Germany from 9.99 euros to 7.99 euros per month. For orders worth less than 40 euros, the delivery fee went from 5.99 euros to 3.99 euros. Prime members in Germany who don't want to sign up for a monthly Fresh membership can still use the service for 5.99 euros per delivery.

Amazon Fresh Competition

Amazon isn't the first company to dream up a fast grocery delivery service. Companies like Webvan and HomeGrocer started delivering food to hungry customers in the mid-1990s. While both of those companies are defunct, the demand for home delivery of groceries never truly faded. In fact, most brick-and-mortar supermarket chains, like Stop & Shop and Giant Foods, offer e-commerce and delivery services to their customers, while many other internet grocery businesses have emerged over the years.

Fresh Direct

Founded in 1999, Fresh Direct serves customers in New York City and surrounding areas, a number of counties in New Jersey, the greater Philadelphia area, Delaware, and Washington, D.C. A minimum of $30 is required for all orders. Those in the five NYC boroughs are charged a $5.99 delivery fee. Delivery fees range from $6.99 to $7.99 for people outside these areas. The service also delivers to the Jersey Shore and the Hamptons in the summer season with a $9.99 and $15.99 delivery fee respectively.

Instacart

You can shop using Instacart if you live in about 5,500 cities in the United States and Canada. The company, founded in 2012, is based in San Francisco and is partnered with more than 40,000 retail and grocery stores. Personal shoppers fulfill and deliver orders within your requested time frame.

The first order is always free. You can choose to sign up for Instacart Express, which costs $99 for the full year or $9.99 a month. This option allows you to receive free delivery for orders over $35. Nonmembers pay a $3.99-minimum for orders over $35.

The Bottom Line

With an impressive infrastructure already established throughout America and same-day delivery available in certain markets, it seemed inevitable that Amazon would enter the grocery market. As long as Amazon Fresh has a record of good customer service and the backing of Amazon’s money, it's likely to be around for a long time.