The Information reports that Amazon is testing a new grocery delivery subscription in three US cities – Denver, Sacramento and Columbus – that will offer
“unlimited deliveries on orders over $35 from Whole Foods and Amazon Fresh to Prime members who pay an extra $9.99 per month.”
The story notes that “grocery delivery used to be included at no extra cost as part of Amazon’s $139-a-year Prime membership, but Amazon started charging a $9.95 fee for all Whole Foods orders in 2021 and added fees of up to $9.95 on Fresh orders below $150 earlier this year. It then lowered the threshold for free Fresh orders to $100 this October.”
KC’s View:
In a separate piece, The Information offers this bit of analysis of the numbers:
Apparently Jim Cramer doesn’t buy his groceries from Amazon. During the CNBC host’s interview with CEO Andy Jassy, which aired Wednesday night, Cramer asked why Amazon doesn’t double the cost of Prime, considering how many benefits the $139-a-year subscription includes. Some regular grocery shoppers would say the company has already done exactly that – through a dizzying series of benefit changes and new fees.
“Let’s do the math: At the beginning of 2021, Prime, which cost $119 a year at the time, included unlimited Whole Foods and Amazon Fresh deliveries on orders over $35 at no extra cost. Later that year, Amazon added a $10 fee to all Whole Foods deliveries. In 2022, Amazon jacked the total price of Prime up to $139. Earlier this year, it started charging fees of up to $10 on all Fresh deliveries below $100.
Then on Thursday, Amazon said it was piloting a grocery-delivery subscription that offers unlimited Whole Foods and Fresh deliveries on orders over $35 to Prime members who pay an extra $10 a month. Multiply that over a year and add it to the base Prime fee, and the same service that cost $119 in 2021 now costs a whopping $259. Now that’s mad money!”
And that doesn’t even include the monthly fee that people will have to pay if they want to continue watching Amazon Prime Video programs without commercials. It is a great point.
It makes me think – aren’t all these additional fees and options a form of friction, which Amazon long seemed dedicated to eliminating?
The thing is, one of the beautiful things about Prime and Subscribe & Save is that they were simple – the value proposition was easy to understand. There was a certain elegance to them.
I like the idea of Amazon testing new programs and figuring out the sweet spot that it can best occupy in grocery. But man, they make things complicated sometimes, which may have the long-term effect of making people wonder if Amazon is really such a good deal.
The post Amazon Pilots New Grocery Delivery Subscription Program appeared first on MNB.
View Original Article
