23% of American households currently buy their groceries online.
That number will leap to over 70% within 10 years, according to a recent report by Food Marketing Institute and Nielson
Online grocery and delivery services have been consistently gaining in popularity as service areas expand across multiple cities and countries.
Grocery and gourmet food brands, it could be time to stop fighting for that eye-level shelf space at your local brick and mortar grocery chain, and focus your efforts online.
To start, let’s examine Amazon Fresh compared to Prime Pantry, and discover the benefits for retailers.
Amazon Fresh vs. Prime Pantry
Amazon Fresh and Prime Pantry are two different offerings with different benefits for customers. Read on for differences in membership requirements, delivery, and product selection.
What is Amazon Fresh?
In August 2007, Amazon ran a beta test in a limited service area for their new grocery and delivery service, Amazon Fresh.
Amazon Fresh delivers groceries to customers’ doors and also provides a pickup service from select retail locations.
Although the number of cities within the service areas is somewhat limited, they are high population locations that are great for offering widespread exposure to a potential Amazon seller and their products.
Why Amazon Fresh exists: To replace your weekly trip to the nearest chain grocery store
What is Prime Pantry?
Amazon Prime Pantry was launched back in 2014. It’s a part of Amazon’s site where Prime members can buy groceries and household products in “everyday package sizes” rather than bulk.
According to Amazon, Prime Pantry gave Amazon the ability to “expand its selection and offer thousands of items to Prime Members that are cost prohibitive to ship for free individually.”
Why Prime Pantry exists: To replace your weekly trip to Target or Walmart
Membership Requirements & Cost
Amazon Fresh: Prime members can get the benefits of Amazon Fresh for an additional monthly membership fee of $14.99. Shoppers can browse perishables, household products, and gourmet specialty items from the dedicated Fresh page. (More on product offerings below.)
Prime Pantry: Prime members do not need to pay extra to use Pantry–they simply load up their cart on Amazon.com with qualifying Prime Pantry items. If there are not five qualifying items per box, there is a flat fee of $5.99 for delivery. (More on shipping and delivery costs below.)
Amazon Fresh–Offers 500,000 items. Amazon Fresh specializes in perishables that need extra packaging in order to be delivered and consumed safely. The delivery packaging is reusable and can be left out for an Amazon driver to pick up at the time of the customers next delivery.
Prime Pantry–Offers regular or “everyday” package sized, non-perishable items as well as other household products to Amazon Prime members. Prime Pantry does not offer the same perishable food items that Amazon Fresh does but it does allow Amazon to offer a wider selection of non-perishable items that would normally be too costly to ship.
Delivery & Pickup
Amazon Fresh–Offers same day or next day delivery depending on the time the order was placed, and the available delivery times for the area. Amazon Fresh also offers pickup in specific locations including Seattle, Northern California, Southern California, New York, and Philadelphia areas.
Most recently, the US postal service partnered with Amazon Fresh to increase the delivery area by allowing orders to be dropped off at a specified USPS locations within a service area and delivered quietly to the customer’s doorstep before sunrise.
Prime Pantry–Pantry items ship just like normal Prime products. As stated, delivery is free for at least five qualifying items per pantry box. Otherwise, there is a flat $5.99 delivery fee per box.
Amazon Fresh and Prime Pantry vs. Competitors
There are some other alternatives to Amazon Fresh and Prime Pantry, and each one offers slightly different products, fee structures, and delivery fees.
|Company Name||Perishable Items?||Household and Non-perishable Items?||Fee Structure|
|Amazon Fresh||Yes||Yes||Prime Membership $99 annually plus $14.99 for Amazon Fresh|
|Prime Pantry||No||Yes||Prime Membership required. Flat Delivery Fee of $5.99 for a box up to 45 pounds|
|Google Express||Yes||Yes||$10 a month or $95 annual membership fee. Members get free shipping. Delivery fee starting at $4.99 per store for non-members|
|Instacart||Yes||Yes||Delivery fee depends on the size of the order and the chosen delivery time. No need for a Costco membership to get items in bulk from Costco.|
As you can see from the table, customers have many choices when it comes to their online grocery and household shopping.
Google Express offers comparable products in the grocery and household category and has similar fees to Amazon. Google Express also gives customers the option to select items from specific stores, and in some cases, even get free shipping.
Instacart has also exploded in popularity recently and has a different fee structure that is based on the order size and time of delivery. They allow customers to order bulk items from stores such as Costco without the need for a Costco membership.
All of these services are great options for various customers and offer a lot of potential exposure for any retailer or seller’s products.
However, there’s a reason Amazon has beat out others online grocery shopping arena. They offer convenience, a massive selection, and fast shipping–and they do those things better than anyone else.
Should Retailers Sell on Amazon Fresh or Prime Pantry?
We’re not going to make the claim that grocery stores will be obsolete in five years. Because they won’t–there are still 75% of shoppers in the US who buy their groceries in person.
But we also can’t afford to be behind the curve.
Consumers are looking for greater convenience, flexibility, and customization for their shopping experience while also being cost sensitive, and all of those needs can potentially be met through ordering online. And right now, Amazon’s doing this better than all other competing platforms.
Sure, they are also expanding their own lines of grocery products. But so are big box grocery stores.
How to Sell on Prime Pantry and Amazon Fresh
Currently, there’s not a straightforward way to do this unless you’ve been invited.
However, we did find information from Seller Support in a forum:
There you have it–contact [email protected] for a chance to sell on Amazon Fresh. We attempted to reach the form for application, but it has expired.
The Bottom Line
Grocery and Gourmet retailers–particularly those of niche or local products–have an incredible opportunity to expand their customer base and make a name for themselves outside of limiting farmers markets and grocery stores by selling via Amazon Fresh and Prime Pantry.
If you’re a Grocery or Gourmet retailer and you haven’t explored selling on Amazon, it’s time. Don’t let your competitors get the upper hand in the impending battle for virtual shelf space.
Source link https://www.cpcstrategy.com/blog/2018/07/amazon-fresh-prime-pantry/