Amazon Enters L.A. for Grocery Delivery | Adweek
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Amazon Enters L.A. for Grocery Delivery

Is the e-grocery space set for a renaissance?

Photo: Carlos Gawronski

It seems like the e-grocery business—for all its problems during the dot-com era—could be on the verge of a Web 3.0 renaissance.

For instance, Amazon today debuts its AmazonFresh grocery initiative in Los Angeles, affording Angelenos the same service that's slowly been rolled out to Seattleites since 2007. It offers same-day and early-morning delivery on orders exceeding $35, while touting a selection of locally grown products among 500,000 items for sale.

Amazon Prime members in certain L.A. ZIP codes get a free 90-day trial for the service. After that period ends, participants will automatically be charged $299 for the next year in what the Seattle-based company is calling a subscription upgrade that's dubbed Prime Fresh. 

The Internet giant reportedly plans to expand the initiative to San Francisco later this year, while taking aim at as many as 20 other markets in 2014.

Amazon's big plans might be rooted in what it has learned about efficient online grocery order fulfillment processes since its 2010 acquisition of Quidsi, a successful e-commerce firm with properties such as Diapers.com (baby products), Soap.com (household items), Wag.com (pets) and BeautyBar.com (cosmetics). Quidsi last month debuted a Prime-styled membership program that covers its sites. 

Meanwhile, these digital grocery and households plays in recent years must really get the goat of folks who sunk serious cash into the likes of Webvan, HomeGrocer.com and Pets.com an Internet life ago.

Other potentially important players in this space include:

- Walmart, which offers free home delivery on some orders exceeding $45;

- FreshDirect, which appears to have a firm foothold on the Greater New York City market but hasn't expanded nationally;

- Peapod, a dot-com-era holdover that was saved by global grocery giant Royal Ahold in 2001. Last year, interestingly, it bought poster space at SEPTA Regional Rail stations in Philadelphia where smartphone users could grocery shop by using the Peapod mobile app and scanning the barcodes of select items—with their orders home-delivered later in the day.

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