Amazon takes on grocery stores with its new grocery service for Prime members.
Just over a month after announcing it was hiking the price for Amazon Prime, the online mega-retailer has launched Prime Pantry. The new grocery shopping option may help sweeten the Prime deal for subscribers, potentially justifying the $20 price increase for some customers.
According to The Wall Street Journal, here’s how Prime Pantry works: Prime members can fill a 4-cubic-foot box with up to 45 pounds of grocery-type items for a flat delivery fee of $5.99, plus the cost of the purchased items. As items are ordered, a virtual box is filled, so you can see how much available space remains. The grocery box will be shipped within four business days.
Amazon has expanded its selection of grocery store items recently, now selling single items – like a box of Cheerios or a fridge-pack of Coca-Cola – in addition to the bulk items it has sold for years, The Associated Press said.
The move is an “important development in Amazon’s aggressive push into consumables,” Sanford Bernstein analyst Carlos Kirjner said. The Seattle company has also been testing Prime Fresh, a grocery delivery service, in several cities.
The Journal said Prime Pantry will compete with similar services from Instacart, Google, Walmart and eBay.
Instacart, which operates around six major U.S. cities, generally charges $3.99 for deliveries within two hours from stores like Costco and Whole Foods and its $99 annual membership includes unlimited free delivery for any order over $35.
EBay’s Now same-day delivery service by comparison charges $5 for same-hour delivery from many local stores in several cities, while Google charges $5 per store visited for its Shopping Express service (it is running a promotion with free delivery for six months).
For most orders of $30 or more Wal-Mart’s To Go service offers delivery of between $5 and $7, though in just a few California cities and the Denver area.
Prime Pantry is one new service Amazon has added to help bulk up its Prime offerings. Prime includes free two-day shipping, as well as free Amazon Instant Video streaming, which will include a number of HBO shows beginning in May.
Are you a Prime customer? Will you take advantage of Amazon Prime Pantry? Share your comments below or on our Facebook page.