Amazon has expanded its AmazonFresh grocery delivery service to a second test market on the West Coast. After testing the program for six years in Seattle, Amazon is expanding same-day delivery service on fresh and packaged foods to Los Angeles.
AmazonPrime customers in several Los Angeles zip codes can receive a free, 90-day trial of same-day and early-morning delivery on 500,000 items, some of which are sourced products from local shops and restaurants, according to The Seattle Times. After 90 days, customers will be invited to upgrade from a regular $79-a-year Prime membership to a new tier called Prime Fresh, which will cost $299 a year.
Amazon is the first to endeavor into a subscription-based shopping service, according to industry analysts. “Amazon just wants to make sure everything goes smoothly before opening it up to the public,” Nikoleta Panteva, senior retail analyst at IBISWorld, told The Seattle Times. “Within the next two or three years, we may see a reduction in that fee, and maybe within five years, they’ll eliminate the fee altogether.”
Orders placed by 10 a.m. will be delivered by dinnertime, while those placed by 10 p.m. will be delivered the next morning. Last October, Amazon opened a new distribution center in San Bernardino to support its Los Angeles expansion.
Amazon reportedly plans to roll out AmazonFresh to the San Francisco Bay Area later this year, and follow with between 20 and 40 additional markets in 2014, according to Reuters and other media reports.
Fresh remains in test mode and Amazon would not confirm which LA neighborhoods are part of the trial. “We know customers value this service, but the economics remain challenging,” an Amazon spokesperson told The Seattle Times. “We will continue experimenting and innovating on behalf of our customers to find a model that works.”
