AmazonFresh rolls out mandatory $299/year ‘Prime Fresh’ grocery membership | Hacker News Reader

AmazonFresh rolls out mandatory $299/year ‘Prime Fresh’ grocery membership

geekwire.com

42 pointspavornyoh55 comments

As a Los Angeles resident, when I experimented with Amazon Fresh, it required a Prime Fresh subscription. I don't recall it ever being free. The $300 annual subscription, when combined with my assessment that the value I received for that $300 was very low, is the reason I did not renew.

That said, I can understand offended customers taking to Twitter to express their frustration. Sometimes, it's not quite enough of a signal to simply not renew a subscription. If you want the company to actually understand why you didn't renew and possibly improve in ways that matter to you as a customer, you must communicate your displeasure in some way. These tweets are just a convenient way to be heard. And lo, here is an article republishing them, possibly to Amazon's frustration.

I love the free market, and recognize that consumer demand is a very strong signal, ultimately the most important signal for a supplier. But I don't see why consumers shouldn't augment that signal with plain old English.

> But I don't see why consumers shouldn't augment that signal with plain old English.

There is a big difference between the people who are saying "wait, now it costs this much money? ok, I'm no longer buying this: that is way too much for too little value; there's no way I'd pay more than $X (where X might be 0)... I wonder what Amazon might be thinking here" and the people who are leaning on "it is morally wrong to be charging a fee for something that was free yesterday" (especially given the system-wide workaround these people often don't even notice, which is the company with the too-low pricing goes out of business and gets replaced by a competitor that charged the right amount from the first day of operation) or the people who are pushing at "I am incredibly angry at Amazon for doing this" (seriously? there's no good reason to be angry). I do not think the latter two are appropriate behaviors for consumers, and it is those kinds of responses I think the people you are trying to speak at are taking issue with.

Factual writing has linear reach and exponential decay through networks, such that most people feel it pointless to bother expressing the facts of their problem. Moral-panic propaganda, meanwhile, is an instrument that companies actually fear, because it has viral potential; and so the one people tend to feel will actually get their complaints acknowledged. It's unrealistic to expect people to engage with companies in any other way (at least unless there's some sort of collective-bargaining structure in place; unions and guilds are perfectly fine making factual arguments.)

I agree about the distasteful hyperbole, but that is what the Internet and social media have become in today's outrage culture. Social media is rampant with hyperbolic reactions to the very slightest of offenses. So the tone of the messages cited in the article, from my point of view at least, seem tangential to the matter of Amazon Fresh. The tone is a problem with social media and outrage culture in general.

I believe the other reply by derefr says more or less the same thing but with more thinking behind why it happens. Meanwhile, I'm saying that I have become desensitized to the sensationalism of social media, tweets in particular, though I still recognize the hyperbole and would prefer less of it.

I also had it in LA for $300 (I believe it was $200 on top of my $100 prime?)

It helped a lot when I was stuck at home with my newborn but after that I stopped using it as much. I do like the idea of not having to go to the market but Amazon hasn't nailed it yet.

The yearly upfront portion works poorly. I think a lot of the issue is the various add-on services are poor -> Amazon Instant Video is not a viable Netflix alternative, I haven't even bothered with the music service, etc.

That being said, the grocery prices average cheaper than Safeway by about $10/week for my household (even better since we actually use Uber to get groceries home for large shipments) and we pay $6/week for delivery so Fresh by itself is a no brainer. They have better selection in a few product areas (though way worse in others) so we can combine grocery + grocery delivery to end up with way more options overall.

One of the sad points here is that savings become less available to lower income people as upfront costs price them out of discounts.. credit cards are a classic example, and now things like this.

I'm constantly amazed that supermarkets in the US don't do delivery like those in the UK. Almost all will do next day delivery for just a few pounds at most. No subscription, just go to the site and order, picking the delivery slot. It works, and is massively popular.

They do. Peapod is available in lots of markets where population density is high enough.

Stop & Shop (Peapod), Whole foods, Shoprite, Kings, and until its bankrupcy, A&P - i.e. every major chain in NJ - all offer online ordering + free pickup and/or cheap (usually free with threshold) delivery for at least 3 years now. Its wildly popular, especially with seniors who get help with heavier items.

So why do people pay subscriptions to Amazon then if they can get it so much cheaper elsewhere?

Marketing?

I was using Fresh in Manhattan (for free, for several months) with absolutely zero sign they would ever be trying their (ludicrous) $300 annual membership here as early as 3 days ago, and I got no notice whatsoever that I now needed to buy-up to a more expensive membership other than when I tried to go back in and place an order today.

They have shitloads of competition in this market. I don't get why they think they can get away with a $300 fee when Peapod/FreshDirect both charge $100 a year. Granted, it isn't same-day delivery, but same-day was rarely available to me anyway. Additionally, Prime Now further cannibalizes the value of this, because most of the grocery items you'd want last minute are available there for no additional upcharge with a smaller minimum and the ability to get a 1-hour window if you Really Need It Now™.

Ah well, thanks Amazon for the totes; I still have a few that I was supposed to return with my next order, which will now be never.

+1 for peapod - and if you switch your grocery shopping to twice a month instead of weekly, you get discounted/free shipping anyway on orders over 100$.

Something wrong with item (e.g. bananas too ripe or eggs broken?) - 10 min phone call and you get a credit for entire item no questions asked. Last time i tried getting in touch with amazon it was a 2 day ordeal (though to their credit, the result was similar).

Honestly, $6 a week for delivered groceries doesn't seem too crazy to me. I guess the bigger issue is that starting with a free or cheap product, and then upping the price later, is a lot more offensive than vice versa.

It averages to $6 a week, but it's priced as a $299 pay it all now payment. $6 a week is probably doable with little thought, $299 is a car payment and probably not an immediate purchase for a lot of people.

It was actually advertised as a trial program when you signed up. I started using them in NYC since February.Since then I've received two emails from them that my subscription has been extended. This email was received in June.

That being said, I don't plan on paying an extra $200 on top of my prime to renew this service. While the prices are comparable to Whole Foods / Fairway / Trade Joes the inventory isn't great. A lot of the items I use to purchase in February are no longer available. I can't ever seem to place an order for baby spinach.... I mean something as simple as that is always out of stock...

---

Thank you for being an AmazonFresh customer! We're happy to let you know we're extending the use of AmazonFresh to Amazon Prime members through September 2015. At the end of this free period, you'll need to sign up for a Prime Fresh membership (an upgraded tier of Amazon Prime) to continue enjoying free delivery from AmazonFresh.

We hope you continue to make AmazonFresh your favorite place to shop for groceries, fresh produce, and everyday essentials. Be sure to visit our Summer Treats store for delicious ways to cool down over the summer.

Thank you,

AmazonFresh

My primary concern with pre-paying is the lock-in for the year. With Prime Pantry/Subscriptions (at least in NYC/TriState), amazon bumped their prices up pretty significantly over the last year. Anecdotal case in point is perrier water 24pk which was $15 then $18 then $22 and went as high as $28. Costco has it for $16 regular and $13 on sale. Instacart works in costco btw, so delivery convenience is negligible.

Further, i am wondering what the source of these products is - at least when you're overpaying in whole foods, you generally know its a local/high quality produce - if this is anything like fresh direct, the quality of items are often worse than local corner bodega.

I remember when Publix tried to do grocery delivery in 2003 and it failed. It makes me think the issue isn't with the technology on the web-side, or even in the route planning. The costs of having refrigerated trucks continually roaming the streets in such large, suburban areas just might not be feasible yet.

In lower-density areas, I think most supermarkets have found that online order + in-person pickup has been more successful, as a halfway solution that's much cheaper. A huge portion of their customers drive past one of their supermarkets on the way home from work anyway. Obviously this doesn't apply to people who don't drive to work in the first place, but about 90% of Americans do drive to work, so the numbers for that option are fairly favorable [1]. And in many zip codes the proportion approaches 100%. Walmart also recently rolled out an online-order / curbside pickup thing for groceries [2]. I'll be interested if any numbers emerge about how it's doing.

[1] http://www.brookings.edu/blogs/brookings-now/posts/2013/10/n...

[2] http://time.com/money/4054549/wal-mart-grocery-pickup-amazon...

"I Am Altering The Deal. Pray I Don't Alter It Any Further" - Lord Vader.

This may indicate a failure. What killed Webvan was low market penetration. They had 3% of the market in 30 markets, and needed 30% of the market in 3 markets. With low market penetration, deliveries are too far apart and there are too few deliveries per truck per hour. Amazon could succeed where Webvan failed only if they achieved a high percentage of potential customers. They'd like the truck to stop at every house. To get there, they had to offer cheap/free delivery at a loss, trying for market saturation.

At $299 per year, that may mean Amazon is giving up on Fresh as a high volume service with high market penetration, and repositioning it as a luxury service with few customers.

In the UK Amazon have said they want to take 2% of the fresh-food delivery market in their initial areas, so it does appear that they're targeting a particular demographic which is price-insensitive but time-sensitive.

What's happening with Fresh looks to me like nothing was learned from the Fire phone fiasco. Amazon became big as a low-price, low-margin online retail company providing a near endless selection of products.

Fresh however already now has a in my opinion a too high price point on many products and a 300.- yearly fee will just make the situation worse. But what's really a deal-breaker for me is that the selection is barely larger than the one of my local deli around the corner and can definitely not compete with the choice offered going to any major super market.

This was very astonishing to me trying out Fresh for the first time, coming from Switzerland where we have the two major supermarket chains delivering their whole range of products all over the country without the need for a yearly subscription. I can't really understand why an international, multi-billion dollar company like Amazon is not able to provide a similar selection, especially given the restriction of currently only servicing major US cities.

Mini rant ahead... I'm in Tempe (near Phoeinix). It is very frustrating that I live in a pretty large area in terms of technology and population. Yet, this seems to be one of the last cities to see services like this (instacart, AmazonFresh, etc). Phoenix is the fifth largest city in the country, and including the suburbs is #4 iirc. I realize we're geographically spread out, but so is the L.A. area.

All of that said, it's a lot easier to plan for per-delivery fees over an annual fee much more than $100, which you already pay for prime... I think they should just let straight prime members order with at $10-20 per delivery fee... that would be a lot easier to swallow.

As a 'Metropolitan Statistical Area' (city & suburbs as analyzed by US census), Phoenix is 12th, with about 4.5M residents:

https://en.wikipedia.org/wiki/Phoenix_metropolitan_area#Metr...

The LA MSA is about 3x larger in population and packs them into 1/3rd the area – so way, way different in how attractive for rolling out a novel service. Population age and wealth probably also figure in.

Houstonian here: I feel your pain. Dallas and Austin often see new services tested and delivered there before we do. We're set to pass Chicago as city #3 by the next census but low population density really hurts us when it comes to bespoke delivery services. Amazon Now is here but fenced by zip code. I expect we'll catch up when commercial drones are allowed.

To be fair, Phoenix is also in the middle of nowhere. There's a decent sized city a few hours to the south, a big city a few hours to the west and a few hours to the east, and a somewhat decent sized city a few hours to the north but that's it. Mostly desert surrounds us. Our airport is among the busiest in the world. We have zero usable water access. I imagine getting stock into Phoenix is slightly more difficult than LA or Austin or Seattle or, well, anywhere.

Kroger, Walmart, and a number of others seem to manage supply lines to/from Phoenix just fine... there's also a major Amazon hub here in Phoenix.

There are several million people in the phoenix area, it's not like we don't have grocery stores, some better stocked with produce than others... not to mention some of the better stocked places tend to have a price premium, which would fit better with the Amazon model.

Ordering groceries isn't, for the most part, about lack of localized options, it's about convenience and time saving. In Tempe, I can order just about any kind of food nearly 24/7... That's prepared food.

I honestly feel that Uber will likely win this battle, as they'll probably source shopping and delivery tasks out of existing infrastructure. That can deliver a solution to more areas with less friction... and for that matter less competition and resistance as they do with ride sharing. I don't know why nobody has started an Uber for deliveries on a larger scale... there are lots of localized/shared delivery services out there, but nothing widespread or relatively universal.

To top it off many of the Amazon warehouses serving LA are located in Phoenix! :)

The Sears & Roebuck catalog was sent to rural farmers who had limited access to durable goods. It does seem to me counterproductive that Amazon tested this in cities that already have easy access to grocery markets.

$299/yr is $5.75 per delivery if you order something every week. But $25 if you only buy once a month. For the service to be worthwhile they need to sell to areas that need better access to fresh foods. There's a name for that, food deserts. And Los Angeles, Seattle, and New York are not on that list. Maybe if they had tested in a place like Phoenix they would have seen much higher use and could justify a lower subscription rate with delivery charge.

http://apps.ams.usda.gov/fooddeserts/foodDeserts.aspx

I'm guessing places that are "food deserts" are generally not affluent enough to be the target market that will pay a delivery fee.

Huh. In SF, at least for me, I think they've always required the $299/year fee. I had wanted to try it out, but since I get most of my groceries from the neighborhood store, it never made financial sense for me.

I can already get free same-day delivery from Amazon or various grocery stores via Amazon Prime Now (I'm in Manhattan). What does an extra $200/year get me?

Extra selection, apparently.

The key differences are the unattended delivery and the instacart (1 hr time slot delivery). The unattended is nice, they put it in a tote/cooler and it stays cool for 3 hours.

Wow that is expensive. Is it because it is same-day delivery? Most UK supermarkets do delivery for a quid or two. It doesn't come the same day, but... $300?!

The only way you'll get it on the same day is if you order it early in the morning for evening delivery. It's not a local supermarket, they need to schedule a driver and bring the stuff to you from their warehouse.

Most supermarkets around me (NYC area) do deliver. Some for free. On top of that, there's Peapod, Fresh Direct, and a bunch of others.

This is a profoundly stupid move by Amazon. I can't imagine anyone would want to pay for this considering the alternatives available in most metro areas.

I got a years worth of delivery from sainsburys for 30 pounds. We've ordered practically every week since January, so it will have come down to less than 60p/visut

2 months ago trying to use amazon fresh told me I needed to be a prime member to use it. I signed up for a year of prime for the sole purpose of using amazon fresh and I was very happy. Now 2 months in they are forcing me to pay another 200$. This may be my fault for not reading my prime subscription terms but I feel tricked into buying prime. I will be trying out instacart in the future.

Amazon generally has good customer service. They might refund you if you ask.

Ironically, Amazon also offers a service that only requires a prime membership - I'm not sure how it differs though, other than selection. From the article:

"The new Amazon Prime Now delivery service offers standard ($99/year) Prime members free two-hour delivery and $7.99 one-hour delivery on a wide variety of products, including some grocery items, although the selection is much more limited than it is on AmazonFresh."

>I will be trying out instacart in the future.

I thought of Instacart when I read the article. With so many options currently on the market, I wonder what made Amazon decide to roll out such a huge membership fee? This is a dangerous gamble IHMO.. Recode.net is already reporting people in Philly, NY and Seattle are already ticked of with the hike. http://recode.net/2015/10/18/seattle-nyc-and-philly-customer...

The thing that bugs me about Instacart is that they have a mysterious set of markups. I was all set to use them for Trader Joe's when I found that out. I don't mind paying more when it's in the form of a shopping/delivery fee, but I have no time for vendors that I can't trust.

Engineer from Instacart here.

As of earlier this year, marked up stores and non-marked up store are now very clearly listed on the site.

I just went and looked again, but apparently I have to register to see anything. So it's definitely not transparent enough to suit me. Once logged in, are the markups clear and documented? Or is it still mysterious?

Regardless, I hope you can see how the secret markups left a bad taste in my mouth. The companies I give my business to are the ones I can trust.

No, the markups are still opaque and vary on an item-by-item basis.

Here's an example (from $5.99 to $7.39 plus a delivery fee. Still a really poor deal:) http://i.imgur.com/VwWk44h.png (To be clear, this picture is from their own site, because the item in question has a price label. Most things don't let you see the store price.)

See my above reply to wpietri :)

How does having to register to see the storefront relate to the transparency of item prices?

I didn't say the markups were available on a per-item basis, I said you could see which stores were marked up and which ones weren't. Just click on the store dropdown, and you'll see this:

http://i.imgur.com/KElc00R.png

We'd rather not mark anything up at all, and if something is marked up, we'd prefer to tell you by how much, but we can't do this right now for structural reasons.

If you're worried about unknown markups, just shop at any one of the stores that says "Prices are same as in-store," and you're safe.

That being said, everyone at Instacart would agree with you -- secret markups suck, which is why we built this feature to tell you which stores are priced the same as in-store. The unknown markups don't exist because some guy in a smoky room twirling his mustache hatched a devious plot, it is just structural. The user interface should have reflected this reality earlier, and it didn't, but now it does. We really do want to be as transparent as possible with our prices.

If you have any specific feedback I can take it directly to the consumer products team, or you can email feedback@instacart.com. They love feedback, positive or negative :)

> How does having to register to see the storefront relate to the transparency of item prices?

At this point, you've lost my goodwill. It seems like you're trying to argue me into liking Instacart's manipulative opacity, which is not happening. But to answer the direct question:

Transparency is about the ease with which people can see relevant information. The more barriers you place between people and the information they want, the less transparent they are.

> for structural reasons

This might mean something to you, but it means nothing to me. Instacart made all of the structure. Instacart now admits that secret markups suck, but they nonetheless started with secret markups and maintain secret markups. If you really want to be transparent with your prices, publishing them on each page should be about a 5-line code change. That you don't is a choice.

> If you have any specific feedback I can take it directly to the consumer products team, or you can email feedback@instacart.com. They love feedback, positive or negative :)

My feedback is that Instacart is a company that I don't trust and, given communications like yours, probably never will. Hope that helps.

Insane. Amazon Fresh has good quality product but it's very expensive. This makes it not even close to worth it.

i cannot fucking understand offended customers. you dont want to pay? dont pay.

I wouldn't say they are offended. Maybe displeased and annoyed.

They had a deal. Amazon unilaterally renegotiated with no notice or explanation. Nobody likes a sudden deal change, and nobody likes being powerless.

I can't understand people getting offended at that. Don't want to hear it? Don't listen.

FTA they announced this a year ago: http://www.geekwire.com/2014/amazon-fresh-require-seattle-cu...

You seem rather nettled that people are sharing their consumer experiences with other people.

Communicating our experiences is the foundation of human society.

You mean you can't understand people who think differently from you?

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