Millions of Americans relied on Amazon grocery delivery earlier this year as the Covid-19 pandemic hit the US, but many had one big complaint: It was often hard, if not impossible, to find an available delivery time slot in many metro regions.
Some customers were forced to check for availability dozens of times a day, including in the middle of the night, while others resorted to using a computer program to grab a spot in line.
“One thing that if I could have a magic wand and do over in the early part of the pandemic, a feature that I wish we had right off the bat, is if we run out of capacity … we want to give customers an equitable and fair way to reserve a place in line,” Stephenie Landry, Amazon’s vice president of grocery (which includes Amazon Prime Now and Amazon Fresh), said Wednesday during an interview for Recode’s Code Commerce@Home virtual event series.
Landry says Amazon has now come up with a solution if there are large spikes in demand this fall and winter, whether because of a jump in Covid-19 cases, a surge in other illnesses (like the flu), or bad weather. If there’s no delivery availability when a shopper tries to place a grocery order, that customer can now sign up to be notified when a spot opens up. The new feature, which will appear in areas only where delivery availability is limited, prompts customers trying to place grocery orders from Amazon Fresh or Whole Foods to reserve a virtual place in line when there is no immediate availability over the next few days. Once a shopper signs up, they are given an estimate for when delivery availability will open up and, when it does, the company notifies them and gives them two hours to place their order.
Amazon is currently employing the new tech feature in parts of the United Kingdom, where recent surges in Covid-19 cases have spurred more customer demand for grocery deliveries. Amazon also increased delivery capacity by more than 160 percent in the second quarter of this year to help handle the new normal in grocery delivery. Landry said Amazon is “kind of expecting” it’ll need to enable the feature in certain parts of the US in the coming months.
Amazon, as well as other online grocery delivery services from Walmart, Instacart, and Target, ran into numerous hurdles early in the pandemic, when governments in many large metropolitan regions issued stay-at-home orders for nonessential workers, causing demand for grocery delivery services to spike dramatically. Just about all services faced out-of-stock issues for the most in-demand products, and it was not uncommon for orders to arrive with missing or incorrect items as warehouse and delivery workers dealt with an unprecedented array of operational obstacles and potential health risks.
And yet these companies still reported record sales. Amazon said online grocery sales tripled in the second quarter of 2020 compared to the same three-month period in 2019. Walmart, Target, and Instacart also recorded huge sales increases on grocery orders. A year ago, Amazon added grocery delivery from Amazon Fresh and Whole Foods to its existing suite of perks available to Prime members without increasing the $119 annual fee. Walmart last month introduced Walmart+, its own membership program that costs $98 a year and offers grocery delivery as its main perk.
For Amazon, though, the surge in demand — for Whole Foods deliveries specifically — has caused frustration for both Whole Foods customers and store employees. Customers in some stores say they have to compete with Amazon delivery contractors for in-demand items.
“I like to pick my own produce, but if I have to fight with eight people over a fricking avocado, maybe I should be hiring someone to do it for me,” one Whole Foods shopper told Bloomberg recently.
When asked about what some customers view as a degraded in-store shopping experience at Whole Foods stores, Landry cited a new Whole Foods delivery-only warehouse in Brooklyn, New York City, as an example of an alternative way the company is trying to fulfill delivery demand. But she added that the new delivery-warehouse model is too new for Amazon to say whether it will be expanded.
“It’s not necessarily a model that we’re going to replicate everywhere, but it’s something that we want to learn about, and we want to see what the impact to the business overall is, so it’s something that we’re looking at closely,” Landry said.
Watch the full interview with Amazon’s Landry.
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