Amazon is piloting a new delivery service in London called “Prime Now”. It is an extension of the current Amazon Prime subscription service. However, Amazon Prime Now cuts down the delivery to 1 hour. Amazon is trying this service in selected postcodes in London with a plan to extend it later.
I am an Amazon Prime subscriber and I love this service. A lot of the products on Amazon is available on Prime and I can get them next day. I ordered a power bank 3 PM on Tuesday, I received it on 10 AM on Wednesday. This is pretty cool! The way I choose products now on Amazon is affected by whether the product is in the Prime scheme or not, and I prefer to buy Prime products.
When I look at the new service Prime Now and start to think what is the value of a one hour delivery?! As a consumer why would I need it?! The power bank I ordered is not urgent, a book or hard disk…etc. but if you think of food the conversation now is different!
I see Amazon Prime Now is a direct threat to the existing well established grocery stores. It is a Disruptive Innovation. Prime Now is changing the business model because simply Prime Now allows me to order my grocery from home through an app and I may have a weekly list that I get delivered on a recurring schedule. This is big deal and will threaten big supermarkets like Tesco, Sainsbury’s, and Asada…etc.
It will be interesting to see whether the large supermarket chains will sense the threat or not, and they will react to this. In my opinion this, is an interesting space to watch.