San Francisco residents can now order their groceries from Amazon.com via its AmazonFresh component Bloomberg reported Wednesday.
"This seems like a huge hurdle for shoppers to jump just to order groceries online, and artificially limits their addressable market," Dan O'Connor, CEO of RetailNet Group told USA Today.
The move comes as the online retailer wants to help people who spend $79 annually for quick delivery, and are known to expend lots of money on the company's website to have their products sent at an accelerated rate.
Consumers who order over $35 worth of items that come in quantities of 500,000 or more including bananas and broccoli tops can get their items the same day.
"They are not doing extensive prepping and trimming of fresh foods. It's a lower touch operation. That means the combination of quality and good prices becomes tougher." Tom Furphy, CEO of Consumer Equity Partners told USA Today. Furphy also assisted in operating AmazonFresh for four years. "They will serve a less price conscious and time-starved customer. They want people to feel good about the prices, but it's about convenience rather than the lowest prices."
Amazon CEO Jeff Bezos also wants the company to offer consumers more items needed throughout the day, when they buy other non-edible products.
"If you go back in time 18 years, I was driving the packages to the post office myself, and we were very primitive," Bezos told CBS News 60 Minutes.
The service is $299 annually in San Francisco, and Los Angeles following 30-days of usage at no cost. Current members can get their money back proportionately if they elect to use the service.
The news is the latest development since Amazon announced plans for a Sunday delivery service, and delivery drones in 2017.
"We like to pioneer, we like to explore, we like to go down dark alleys and see what's on the other side," Bezos told 60 Minutes.
