Turns out, Amazon’s not so fresh after all. The Seattle-based company notified AmazonFresh customers in select markets that it would no longer serve them, effective Nov. 30.
Major cities like New York, Boston, Chicago, Philadelphia and Los Angeles will continue to have service, according to media reports.
AmazonFresh has had a slow process of expansion. Introduced nearly 10 years ago in Seattle, the service only recently started to expand to markets beyond its Seattle, San Franciso and Los Angeles core.
“I think they just haven’t been able to get this to work” said Bill Bishop, chief architect of Brick Meets Click, Barrington, Ill., in an e-mail. “To me, AmazonFresh was a strategically important initiative so it’s taken a long time; i.e. longer than normal, for them to reach this conclusion.”
Amazon says the pull back is not related to its Whole Foods purchase, and Bishop agreed.
“It’s clear that Amazon needs to get fresh right if they’re going to be successful in building out their long term goal of creating and then controlling an entirely new direct-to-home distribution/retail system,” he said. “There will be a lot of intermediate steps on this journey, mainly for test and learn. Whole Foods is just a small part of getting fresh right, and is certainly no substitute for AmazonFresh.”
Brandon Rael, vice president of strategy and operations of Strategy Consulting, New York, said enhanced collaboration with Whole Foods is already happening, and will continue to expand.
Customer data, analytics and transaction history from Whole Foods shoppers will help Amazon in its grocery efforts, but in the near term, grocery pick-up at Whole Foods with Amazon integration is a more likely scenario than further expansion of AmazonFresh delivery.
“(Grocery) delivery is a dilemma … perhaps pick-up is the right strategy,” he said. “The advantage is getting the consumer to the store, where incremental purchases can be made.”
In the long term, Rael expects expansion of smaller formats, a possible combination of Amazon Go and Whole Foods 365 catering to quick in-and-out shopping, with the option to pick up online orders.