Amazon's online grocery delivery service to expand in 2014
The grocery delivery service, Amazon Fresh, looks to expand
Amazon's online grocery delivery service is expanding.
Amazon Fresh has plans to expand to add 20 more areas in 2014.
The service has been tested in Seattle for at least five years and was recently introduced to the Los Angeles area.
“If somebody can save you time by shopping those aisles for you, and then ship it and bring it to your house, that's pretty compelling. Now Amazon can do it effectively? Only time will tell,” said Joe Feldman of Telsey Advisory Group.
Analysts agree that it would be easier for Amazon to expand to larger cities, like Houston, where it's easier to deliver, and residents seem to shop at traditional grocery stores, than superstores, like Walmart.
Walmart sells more groceries than any other U.S. supermarket, working with Michelle Obama to offer healthier food options, and the superstore just announced a new Freshness Guarantee program.
Since grocery is a low-profit business, the real profit for Amazon would likely come from shoppers adding other non-food items to their delivery cart.
Historically, online grocery hasn't had a lot of success distributing the traditional grocery market.
However, Amazon has the logistics and expertise in place.