Photo: RetailWire
How big an impediment to growth has the $299 annual fee been for the AmazonFresh online grocery delivery program? The company may soon find out with a new program that essentially lowers the annual subscription fee by adding a monthly payment of $14.99 on top of the annual $99 paid by Prime members.
To be sure, the nearly $279 it will cost members over the course of a year is not a huge savings, but avoiding the bigger one-time outlay of funds is viewed as a more attractive option for Millennials and other Prime members who have yet to join AmazonFresh.
The new $14.99 fee is being positioned as an add-on to existing Prime memberships. Current Prime members who are not using AmazonFresh have the option of a free 30-day trial before they begin paying the monthly fee. According to GeekWire, current AmazonFresh members will continue under their existing program until it expires and then will be moved to the monthly fee. Those who want to make the switch before their year ends, can do so by calling Amazon customer service.
The e-tailer is taking this step as it faces increased competition from groceries. Kroger, Walmart and other grocers have been ramping up click and collect efforts. Pure-play rival FreshDirect recently raised $189 million, the largest round of funding in its history, from investors led by JP Morgan Asset Management. Jet.com, which has been ramping up its grocery business, is now part of Walmart.
- AmazonFresh
- FreshDirect dominates grocery delivery in New York. Now it has $189 million to compete elsewhere. – Recode
- AmazonFresh drops grocery subscription to $15/month, axing $299/year fee – GeekWire
- Can we finally let Webvan rest in peace? – RetailWire
- Will Jet.com’s online fresh grocery pilot crash or soar? – RetailWire