Major Retailers Swoop in to Take Control of Grocery Industry
The grocery business is ripe with difficulty in this day and age, at least from an economic perspective. On a weekly basis, shoppers travel great distances to wander the aisles of the supermarket in search of their favorite foods. It’s a significant test of patience as well as a costly routine when factoring in both time and gasoline. Grocers, on the other hand, are trying to bridge the gap between consumers and producers with chains of stores that are conveniently located. Each store is serviced by a complicated transportation and logistical infrastructure.
In the modern age, Internet users can order practically anything their hearts desire – from beds to books – with just a single click. The online grocery industry produced $15 billion in consumers in 2013, according to Forrester Research. Compare that with the $1 trillion grocery industry.
Major companies like Walmart, Trader Joe’s and Amazon have begun experimenting with grocery delivery. Many investors have questioned the outcome of grocery delivery due to logistical concerns. Quite simply, it’s difficult to deliver goods – especially perishable goods – in 24 hours or less. Given how the margins in the grocery industry are remarkably thin, it can be difficult to honor a shopper’s requests in an appropriate amount of time.
Two organizations are attempting to pull off this feat.AmazonFresh is currently available in a trio of West Coast cities: San Francisco, Los Angeles and Seattle. Some business insiders have indicated that upwards of 20 new cities may be AmazonFresh over the next year. AmazonFresh currently charges $299 each year for Amazon Prime membership (featuring free video content), as well as free delivery. Meanwhile, Instacart is a relatively new operation that hires shoppers to visit grocery stores in order to complete customer lists. These shoppers pay full price for the selected items and then deliver the groceries by bicycle to customers within a certain region. At this time, Instacart has a one-hour guarantee.
Categories: Business