Daily insights for city builders, delivered every morning at 6 AM ET. I’m Brandon Donnelly — a Toronto-based real estate developer and founder of Globizen. I’ve been writing here since 2013.
Amazon Fresh has just announced that, effective February 28, it will be raising the threshold for free grocery delivery. Orders under $50 will be charged a $9.95 fee. Orders between $50 and $100 will be charged a $6.95 fee. And orders between $100 and $150 will be charged a $3.95 fee. Orders above $150 will be free. Previously, the threshold for free delivery was $35.
This is likely an indication of two things. It speaks to our current tech headwinds (see “The Four Horsemen of the Tech Recession“) and it speaks to the fact that grocery is unique. It requires a whole separate logistics chain, compared to all of the other things that Amazon will deliver to you. Food goes bad. It bruises. And it may require refrigeration.
This makes online grocery delivery more challenging and more costly.
These are autonomous sidewalk robots from Cartken:
And last week, Uber announced that customers in Miami would start to see some of their food and grocery orders being delivered by them. The way it works is pretty simple. The app tells you when you need to meet your robot on the sidewalk (they apparently don’t do elevators). You open their secure compartment through your phone (or a code?). And then there’s your food! Next year, both companies intend to roll out this service across more of Miami-Dade and in other cities.
This isn’t the first sidewalk robot in existence. I’ve seen a handful of ones here in Toronto. But if it works, this could be a pretty meaningful partnership. Uber used to do self-driving autonomy in-house, and it was always positioned as central to the company’s future. Uber ended up selling off that part of its business in 2020 in order to raise cash and because autonomy started feeling a lot more difficult than probably most people expected. But what seems clear is that automation remains an important objective for the company. And for good reason.
I would imagine that, for some people, it’s going to feel weird seeing fleets of sidewalk robots roaming around our cities with shawarma wraps and burritos. But one of the things that services like Uber Eats have taught us is that a lot of people are willing to pay a premium for extreme convenience. So if these robots can add to that convenience and also make fulfillment a little cheaper, I suspect that people will quickly get over the weirdness.
“We are excited about how this partnership with Uber will bring the advantages of robotics to food delivery—and ultimately create more connected communities,” said Christian Bersch, Co-founder and CEO at Cartken. “Together, we have the opportunity to reduce traffic congestion, help local merchants to increase delivery capacity, and bring consumers fast, convenient, and emission-free deliveries.”
So Amazon is buying Ring (they make video doorbells, among other things) for north of $1 billion. Supposedly, it is the second largest acquisition that Amazon has ever made – the first was Whole Foods.
If you consider that Amazon is also looking to enter the delivery business, it should be obvious that they want to control everything related to the home delivery process.
For one, it likely enhances Amazon Key and helps with the “porch pirate” problem. Apparently Amazon has had to restrict same-day delivery from some high crime neighborhoods because of this exact problem.
And there’s already speculation about what this could mean for grocery deliveries. Amazon needs to find a frictionless way to get your food orders into your refrigerator.
There are also many possible tie-ins to Alexa/Echo. It’s probably safe to assume that Jeff Bezos sees a lot more than just a doorbell with a camera in it.
Today it was announced that Amazon is planning to launch its “Prime Now” service in Vancouver and Toronto this November and January, respectively.
The pilot program will offer two-hour deliveries for members and, according to the Wall Street Journal, will be be heavily focused on groceries.
It’s worth noting that most of Whole Foods’ stores in Canada (now owned by Amazon) are in and around Vancouver and Toronto. And that Amazon has already started lowering prices to make those stores more competitive.
Right now a “Prime” membership in Canada costs CAD$79 per year. I’m not sure if the price will change at all for “Prime Now”, but let’s assume for the sake of argument that it won’t.
If this service was available to you today (or if you’re in a city that currently has it), would you (do you) use it? I would love to hear your thoughts in the comment section below.
Two common objections around online grocery shopping are that many people want to touch and feel the goods before they buy and that perishable deliveries are a challenging thing to coordinate.
I think I can work around those objections and would certainly try this today if it was available in Toronto. What about you?
