This week, Amazon announced the expansion of its experiment in grocery delivery to Los Angeles. That two-fold increase likely yields an even higher rate of return for Amazon’s bottom line. In effect, what Amazon will have done if Prime Fresh catches on is get you to pay more for the privilege of spending more on Amazon. The bigger news, however, was the unveiling of a new version of the hugely popular Amazon Prime.
But the Los Angeles rollout and the debut of Prime Fresh is the first signal of Amazon’s intent to try groceries at scale.
Succeeding at groceries alters everything else because groceries are the toughest delivery problem to solve.

If Amazon can successfully create that kind of momentum around groceries, the profit potential could be greater still. If Amazon gets groceries right, the implications are far greater than another convenient option for buying your daily bread.
Less than two decades after launching, Amazon could change our basic expectations once again about how we shop for everything. And as Allis points out, the time window for perishable groceries is a lot tighter than the window for books. Instead, he says, Amazon will have to seek perfection in minimizing missed connections and lowering the related cost of lost perishables. But Amazon is also no doubt figuring that once you do pay them nearly $300, you damn well plan to make the most of it.

Amazon is rolling out its experiment in groceries slowly because getting them wrong risks a spike in customer mistrust that would undermine the company’s tightly tended reputation for unwavering competence. If Amazon ever plans to deliver groceries beyond the select zip codes targeted in the current Prime Fresh trial, the company has some serious numbers to crunch.

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