On Thursday, Amazon announced that its Prime Now members will get their groceries delivered to their doorstep in just two hours. If the order is worth $35 or more, the shipping will be free.
The grocery delivery service will only apply to items purchased on Whole Foods’ website. Amazon bought the organic grocery giant for $13.7 billion last summer.
The new delivery system, however, will be initially tested only in a handful of U.S. cities. Cincinnati, Austin, Dallas, and Virginia Beach are reportedly on the list. If Prime users want their deliveries in an hour they will have to pay an extra fee of $7.99.
The new service, which can be accessed every day from 8 a.m. to 10 p.m. local time, will become a great challenge to similar delivery services like Instacart. The latter can also deliver packages in two hours, and can take orders from other retailers too, not just Whole Foods.
Amazon Threatening Grocery Retailers
According to a report from Bloomberg, Whole Foods struck an exclusive deal with Instacart last year which will expire at the end of 2020. Whole Foods is also an investor of the same-day grocery delivery service.
Instacart wouldn’t comment on that agreement, but said it will continue its cooperation with Whole Foods. The company seemingly has exclusive deals with QFC and Albertsons, as well.
Instacart CEO Apoorva Mehta said last fall that Amazon sent a clear message to other grocery retailers when it bought Whole Foods: “Amazon was coming”. As a result, many of Amazon’s new rivals sought an e-commerce strategy that could offer their customers same-day delivery.
According to the Wall Street Journal, Whole Foods workers will process grocery orders and hand them to Amazon’s delivery drivers. The e-commerce giant announced that it plans to expand its grocery delivery network across the U.S. this year.
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