The Series B round for Witherspoon’s Draper James brand was led by San Francisco-based Forerunner Ventures.
AmazonFresh includes free same-day delivery on orders of $35 or more.
Rumors have swirled for months about if and where Amazon.com Inc. might next expand AmazonFresh, the same-day grocery delivery program it began testing six years ago in Seattle. Now we know. Consumers who are members of Amazon Prime and live in select ZIP codes in Los Angeles can order perishable groceries and about 500,000 other products Amazon sells, and then have the e-retailer deliver them the same day. Delivery costs nothing for orders of $35 or more. Orders of less than $35 incur a $7.99 charge. Amazon says it will expand the service to others areas soon, but it gave no details.
This marks the first time Amazon has offered same-day delivery in Los Angeles. The e-retailer already offers same-day delivery, which it calls Local Express Delivery, in 10 other markets: Baltimore, Boston, Chicago, Indianapolis, Las Vegas, the New York metropolitan area, Philadelphia, Phoenix, Seattle and Washington, D.C.
Members of Amazon Prime—the membership program that provides two-day shipping and a host of other benefits like access to digital content for $79 a year—can try AmazonFresh free for 90 days, Amazon says. After 90 days, Amazon will convert Prime members into Prime Fresh members. Prime Fresh membership costs $299 a year. Prime members can opt out of having their memberships converted at the end of the trial period, but must upgrade to Prime Fresh if they wish to continue using the service. Prime Fresh combines the features of Amazon Prime and gives free same-day deliveries to AmazonFresh orders of $35 or more.
“I think [the $299 price] is a bargain and it will not only create innovation in grocery, but it gives you yet another reason to order anything and everything from Amazon,” says Scot Wingo, CEO of ChannelAdvisor Corp., which helps retailers sell on marketplaces operated by Amazon, eBay Inc. and other companies.
The $220 difference between an Amazon Prime and an Amazon Prime Fresh membership may help Amazon offset some of the added costs for same-day delivery. Craig Rosenblum, partner at food retailing consulting firm Willard Bishop, estimates the average cost per order for same-day delivery is $12-$13 in highly populated areas.
Consumers visiting AmazonFresh.com can order non-grocery products like cameras and books along with their artichokes and milk for same-day delivery. Bulk-sized products—like a three-pack of Lysol Disinfecting Wipes, similar to what consumers might find at a warehouse store—are also available through AmazonFresh. Consumers can also order products from 27 local retailers, such as fresh fish from Santa Monica Seafood or cookies from Cake Monkey Bakery.
Amazon says orders placed by 10 a.m. can be delivered by 6 p.m. the same day. Orders placed by 10 p.m. can be delivered by 6 a.m. the next day, although some items, like those supplied by other retailers, may require advanced orders. Consumers can pick a three-hour time slot for delivery. Amazon says it’ll leave orders stored in temperature-controlled totes at consumers’ doorsteps. If a consumer resides in a limited-access building, she can book a one-hour time slot and has to be there to accept it.
Amazon says it is fulfilling AmazonFresh orders out of its fulfillment center in San Bernardino, CA, located about 60 miles east of Los Angeles.
Peapod LLC, No. 55 in Internet Retailer’s Top 500 Guide, and FreshDirect, No. 75, both deliver groceries to consumers’ homes, but neither has operations in Los Angeles. Amazon is No. 1 in the Top 500 Guide.