Whoever thought Amazon.com just couldn't get any bigger is in for a new round of surprises. The online mega-retailer is now planning to release its own brand of groceries. This should come as welcome news to Amazon.com afficionados looking to do even more of their shopping online.
According to a report by The Wall Street Journal, brands like Wickedly Prime, Mama Bear and Happy Belly will be attached to basic foodstuffs like nuts, tea, cooking oil, snacks and baby products, according to the Journal.
The new food brands will only be available to Amazon Prime members, another reason for holdouts to sign up for the service, which currently costs $99 per year and offers free 1- and 2-day delivery on eligible items.
It's not the first time Amazon has gotten into the grocery business, but it is the first time Amazon will compete directly with other brands. Fresh, Amazon's grocery delivery service, is projected to make nearly $9 billion in sales by the end of 2016, a big slice of the $33 billion online grocery pie.
Even with Fresh and Prime delivery, most consumers still like doing their grocery shopping in person. Online grocery sales account for only a small fraction of the U.S. grocery retail business, which has an estimated value of $795 billion annually.
Other companies like Jet and Costco are cutting prices to stay competitive in the online grocery marketplace, but Amazon.com's edge is its national network of warehouses and its superfast Prime delivery service.
Jet's Smart Cart discount lets users save money by highlighting items that can be quickly shipped from a warehouse close to home, while Costco relies on its network of brick-and-mortar stores to deliver groceries to consumers' doorsteps.
Jet and Costco's annual membership fees are lower than Amazon's, running at $50 per year instead of $99 per year for Amazon Prime. Amazon Prime members may pay more per year but they also get more. Jet is limited to groceries and household items, and part of the fun of shopping at Costco is wandering around the aisles in search of hidden treasures.
A high school senior recently won admission to 5 Ivy League schools with a stellar essay about what shopping at Costco taught her about learning and life. She probably wouldn't have been accepted with a similar essay about clicking through Costco's website.
Amazon's move into groceries comes just a few months after it started addressing gaps in its clothing selection.
In February, Amazon launched its own clothing line with 1,800 products including women, children and men's clothing in partnership with 7 private labels. Some clothing brands won't sell on Amazon.com, which prompted the company to start offering its own lookalike duds.
Last week, the Tyson Foods announced that it is partnering up with Amazon Fresh to offer an online recipe delivery service, codename Tyson Taste Makers. There's no word yet about whether Amazon will offer vegetarian or vegan options, or whether consumers will trust one of the country's biggest meat processors to make animal-friendly foods.
Grocery and recipe delivery represents a huge opportunity for Amazon, says Business Insider. Other recipe delivery startups such as Blue Apron, Plated and HelloFresh have struggled to turn a profit. Amazon, the world's biggest online retailer, might just be able to make the supermarket (and maybe even restaurants) another thing of the past.
A major benefit for holders of rewards payment cards from American Express, Chase, Citi and Discover is that you can redeem your credit card rewards for purchases directly at the Amazon.com checkout.
Do you need a credit card? It pays to shop around using a credit card website like GET.com.
Image courtesy of Amazon.com