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Amazon Fresh Delivers Questions From Competitors

5-18-16

By Erin Delmore
Correspondent

In a world where time is money, Amazon is looking to bring more than books, clothes and electronics to your doorstep.

“The same drivers that make buying consumer electronics or clothing attractive for same-day delivery, that applies to the modern household, where time is a very valuable commodity,” said John Boyd, principal of The Boyd Company.

The e-commerce behemoth is delivering produce, meat, dairy and other groceries via next-day delivery to customers in eligible zip codes. The Amazon Fresh operation center in Avenel services Jersey City, Paterson, Newark and Elizabeth.

With a workforce soon to be nearly 8,000 strong, Amazon is one of the largest private employers in New Jersey.

The company operates two fulfillment centers in the state: one in Robbinsville and one in Carteret, each more than 1 million square feet. It’s set to add two more by the fall, in Carteret and Florence. Another four centers support the operation. Add the Fresh outpost in Avenel, and the company is up to nine locations by year’s end. Boyd counsels corporations on where to locate their facilities throughout North America. He says New Jersey is a natural fit for the distribution sector.

“The Robbinsville facility can serve both the greater Philly market and the greater New York City market, with labor and real estate costs almost 15 to 20 percent less than it being in Bergen County,” Boyd said.

Amazon doesn’t share stats on its Prime memberships, but an estimate by a consumer reporting firm claims nearly half of all U.S. households have a Prime membership. Consumer Intelligence Research Partners says Prime members spend on average more than $1,000 a year on the company’s website — nearly twice as much as non-members. It all adds up to massive profits for Amazon and massive pressure on the competition.

“We really focus on what makes us unique and special,” said Director of Consumer Affairs for Wakefern Food Corporation Cheryl Macik.

Macik represents ShopRite. The supermarket chain’s been offering online shopping and home delivery through it’s “ShopRite from Home” program since 2002.

“If you want four bananas instead of two bananas, or a pound of bananas that’s split between green bananas, that will last a little longer in the week, as opposed to yellow bananas that are ready to eat right now, you have the ability to be very specific in your order as to the things that you’d like,” Macik said.

She says nothing beats brand loyalty built over 70 years in the business and nothing replicates the sensory experience of in-store shopping.

“People like to touch, feel and smell their produce. But they also might want to come in and make an appointment with the dietician. They might want to pick up a meal to go for the convenience of having at lunch or dinner at home, and I think that’s what makes us uniquely positioned to serve that online shopper. We provide both,” said Macik.

Independent supermarket owners told NJTV News they don’t see Amazon Fresh as the competition. They pointed out, the online service is for customers who’d trade a few cents on the dollar for convenience. The service doesn’t lend itself to bargain shoppers, who cherry-pick sale items off the shelves, the kind store owners say they’re seeing more of as food prices rise.