Amazon’s New Subscribe & Save Grocery Service A Good Idea But With The Wrong Merchandise

Written by Evan Schuman
May 16th, 2007

Amazon is truly trying to make a go of the online grocery segment, and the Subscribe & Save feature it introduced on Tuesday is a good example of how. But the new program?which promises customers automatic delivery of grocery products with discounts of 15 percent and free shipping?is also an illustration of Amazon?s initial weakness.

Several E-Commerce sites have tried to make a profit with grocery online, with Priceline probably the most notorious at making a big noise and a big loss. One of the few that seems to be making some serious headway is Peapod, which has the pedigree to do grocery right: It?s owned by Stop & Shop.

The Subscribe & Save concept is based on the idea that most consumers have to repeatedly purchase the same product at regular intervals. So why not automate it and save the customers the trip?

Maria Renz, runs the grocery efforts for Amazon as their VP of Consumables. In a statement Amazon issued on Tuesday, Renz gave the pitch for the new service.

?We are excited to enable customers to set up automatic reorders of their favorite products delivered to their door at discounted prices,? Renz said. ?And with free shipping, the cost and convenience of Subscribe & Save is a winning combination.?

The program apparently sends automatic e-mail reminders allowing customers to make changes as needed or ?cancel at any time. The program requires no minimum purchase amount and no time commitment for ultimate flexibility,? she said.

Amazon said the launch includes more than ?22,000 non-perishable items from leading brands, including Kellogg?s, Seventh Generation and Huggies.?

But a quick peek at their available products puts this into context. For example, one item where I thought this might be an especially valuable service is for bottled water because it?s needed regularly, can be heavy to hold and?with certain limits that can be assumed with the typical warehouse and truck?is temperature and shelf-life agnostic.

So go onto Amazon and click on their grocery list for ?water.? On the day of the announcement, it offered a total of three options: Zico Pure Coconut Water; Kellogg?s Special K20 Protein Water Lemon Twist; and the same Kellogg?s brand for ?tropical blend.? Those are probably fine water choices (the coconut one is a big maybe) but what about the more traditional established water brands? Compare that to the same search conducted at, which returns water from Poland Spring, Aquafina, Evian, Fiji and others. That was just under drinking water, but Peapod also offered ?enhanced? waters. (Personally, if I want water that has a hint of orange taste, I just buy a cheap orange juice.)

A search for ?soda??another American grocery store favorite?illustrates the same trend. The Amazon soda list consisted of products from Essn and Airforce?and that was it. Hardly the dominant providers in the soft drink arena.

Amazon?s efforts are worth applauding for their strategy and pricing, but the initial products they offer are underwhelming. It?s as though Amazon tried starting its bookstore existence by offering obscure books by arguing to consumers that they?re really written well. The product quality may be fine, but if they don?t offer the most expected brands in most categories, it?s going to be hard to change American consumer habits. Especially when much better-stocked options such as exist.


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