FastCompany: AmazonFresh a "Trojan horse;" 20 more markets expected


In a cover story on Jeff Bezos and Amazon (AMZN), FastCompany's J.J. McCorvey observes the company's new AmazonFresh grocery service (offered via its $299/year Prime Fresh free shipping plan) is a "Trojan horse" meant to give Amazon's broader same-day delivery efforts needed scale.

Amazon is also hoping its same-day infrastructure (replete with Amazon trucks) will increase its appeal to 3rd-party sellers (now responsible for 40% of unit sales) by lowering delivery times. Merchants already cite access to Prime as a reason for outsourcing fulfillment to Amazon (and giving a ~20% cut).

EBAY could prove a formidable same-day rival. Instead of building its own soup-to-nuts infrastructure, eBay is relying on dozens of offline retailers (inc. major national chains) to help handle fulfillment. Google is also dipping its toes into same-day.

Currently available in L.A. and Seattle, AmazonFresh is expected to expand to 20 more markets, including some international ones. SunTrust recently predicted an NYC launch will happen in 2014.

Also mentioned by McCorvey: Amazon is now able to ship items less than 2.5 hours after an order is placed; and wants to further lower than number; Prime now covers 15M+ items (up from 1M in '05); and Amazon is still "evaluating" how to use Kiva's robots.

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Comments (8)
  • James Sands
    , contributor
    Comments (2689) | Send Message
     
    Interesting, as Amazon evolves, they become more like a bricks-n-mortar business.

     

    Full circle.....
    11 Aug 2013, 06:33 PM Reply Like
  • krk
    , contributor
    Comments (866) | Send Message
     
    Yup. Compare Amazon's Inventory Turns to Wal-Mart's.
    Eeerily, exactly the same!
    8.34 !!

     

    http://bit.ly/18twHMc
    http://bit.ly/13RaIMt
    11 Aug 2013, 06:50 PM Reply Like
  • Gary J
    , contributor
    Comments (10906) | Send Message
     
    Amazon goes to customer, not other way around. duh
    12 Aug 2013, 07:09 AM Reply Like
  • Joe Eifrid
    , contributor
    Comments (355) | Send Message
     
    The problem with AMZN ever being a truly profitable company worthy of its valuation is that they think they can do at no cost to the bottomline. Services come at a cost, and right now AMZN is not passing that total cost on to the customer. They can only do that so long. I love AMZN's service and I am sure they can grow sales as long as they are not making profits. How long the market let's them get away with that is anyone's guess.
    12 Aug 2013, 08:35 AM Reply Like
  • krk
    , contributor
    Comments (866) | Send Message
     
    My hunch is that they are playing the growing A/P "float" game to keep the profit-less sales engine growing and hoping for a pivot into proprietary high-margin hit products like an iPhone that can be scaled into its massive distribution machinery overnight. They might have hope their e-ink Kindles would be the one, and their recent acquisition of Liquavista suggests that this wet dream is still alive!
    Amazon is working on displays that Apple and Samsung can’t match
    http://bit.ly/1ctNX6X
    12 Aug 2013, 11:45 AM Reply Like
  • Technology Equity Strategies
    , contributor
    Comments (3082) | Send Message
     
    Gary,

     

    just interested in your view of the weak sale data today and the price action in your Amazon over the last couple weeks.
    13 Aug 2013, 11:59 AM Reply Like
  • Gary J
    , contributor
    Comments (10906) | Send Message
     
    What sales data? I don't pay that much attention to numbers except the one on the ticker, of course.

     

    As I have written elsewhere I sold much of my AMZN before earnings and bought a Bimmer - a Amazon Bimmer! lol

     

    Kind of hope it goes down some more now so I can jump in again with both feet for the long term!

     

    Oh, WSJ says "lackluster retail sales growth" Looks like the market is up afternoon - another number that doesn't much matter.
    13 Aug 2013, 12:41 PM Reply Like
  • Joe Eifrid
    , contributor
    Comments (355) | Send Message
     
    "Amazon is also hoping its same-day infrastructure (replete with Amazon trucks)"

     

    Dang...now adding (they say investing in) a fleet of trucks to their excuses for not making a profit?? Then they will be making deliveries for others and suddenly we have the next UPS - another low margin business. http://bit.ly/13cQVZs

     

    "Amazon is now able to ship items less than 2.5 hours after an order is placed;"
    I just placed two orders that qualified for free shipping and it took a week to get it. I do not have prime membership. I wonder if you use the $25+ free shipping option if they delay shipping to try to get you to sign up for Prime? Other orders have come quicker.
    11 Aug 2013, 09:27 PM Reply Like
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