The Associated Press reports that Amazon is working with local food retailers in New York City - including D'Agostino's, Gourmet Garage, and Eataly - to offer one-hour delivery of products from those stores in an effort that seems clearly designed to blunt the impact of smaller disruptive delivery services such as Instacart, Uber and Postmates.
According to the story, "The service is only available via for members of its $99 annual loyalty program and via Amazon's Prime Now app. It's free for two-hour delivery and $7.99 for one-hour delivery ... Prime Now, which offers one-hour delivery on some of Amazon's own products, is available in Atlanta, Austin, Baltimore, Dallas, New York City and Miami."
According to the story, "The service is only available via for members of its $99 annual loyalty program and via Amazon's Prime Now app. It's free for two-hour delivery and $7.99 for one-hour delivery ... Prime Now, which offers one-hour delivery on some of Amazon's own products, is available in Atlanta, Austin, Baltimore, Dallas, New York City and Miami."
- KC's View:
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I think this is a very smart move by Amazon. Less so by the retailers, though I am conflicted.
Amazon's motivation is simple. It wants to generate more sales and profits, expand its ecosystem, and can do so by essentially growing the Marketplace portion of its business that provides e-commerce services to third parties. No downside here.
As for the retailers ... well, I would remind them that Borders once outsourced its e-commerce business to Amazon, and it now is dead. Toys R Us did the same thing, and I'm not sure it has ever recovered. I understand why this seems appealing, especially to a company like D'Agostino's which is casting about for ways to achieve relevance in a very tough marketplace. But outsourcing fulfillment to Amazon is every bit as dangerous - or even more so - as jumping into bed with Instacart.
Except, of course, some companies may think that they have no choice, that they cannot afford an e-commerce strategy on their own. Tough choice to make, and I'm not sure there is a good one.
