Amazon has announced a new subscription-based grocery delivery service, targeting its Prime members and customers who use Electronic Benefit Transfer (EBT). The service, which offers unlimited grocery deliveries on orders exceeding $35, is now available in over 3,500 cities and towns across the United States.

The subscription is priced at $9.99 per month for Prime members, providing them with an option to integrate grocery deliveries with their existing benefits. For EBT cardholders, the subscription is offered at a reduced rate of $4.99 per month, making it more accessible to low-income shoppers.

This subscription service includes groceries from Amazon Fresh, Whole Foods Market, and various local and specialty stores available through Amazon’s platform. Subscribers can choose from a vast selection of nearly 100,000 items, including national brands and organic foods. The service also features one-hour delivery windows at no additional cost, unlimited 30-minute pickup for any order size, and priority access to Recurring Reservations for weekly orders.

The offering extends to numerous local and specialty retailers like Cardenas Markets, Save Mart, Bartell Drugs, Rite Aid, Pet Food Express, and Mission Wine & Spirits, enhancing the variety available to customers.

According to Amazon, the subscription can effectively pay for itself with just one delivery per month, based on average order sizes and frequency. A pilot program conducted in cities like Columbus, Ohio; Denver, Colorado; and Sacramento, California showed that more than 85% of participants were extremely or very satisfied with the unlimited delivery option, citing significant savings on delivery fees and enhanced convenience as the primary benefits.

INSIDER TAKE

Amazon’s move to introduce a grocery delivery subscription aligns with its broader goal to dominate various facets of online retail and enhance customer loyalty. By integrating this service with its Prime membership, Amazon not only boosts the value proposition of its subscription model but also potentially increases the frequency and volume of orders placed by existing customers.

For EBT users, the reduced subscription fee represents a significant outreach to a demographic that often faces barriers to accessing convenient and affordable grocery delivery services. This could not only improve food accessibility but also position Amazon as a socially responsible corporation looking to support underserved communities.

Furthermore, the expansion of this service could put pressure on competitors like Instacart and traditional grocery chains, pushing them to innovate further or reconsider their pricing strategies to retain market share.

Amazon’s new grocery delivery subscription service may serve as a catalyst for increased customer retention and spending among existing Prime members, while also expanding the company’s reach among lower-income consumers. This initiative could redefine the dynamics of grocery delivery services, emphasizing cost-efficiency and convenience as critical factors in consumer decision-making in the online grocery market.