Amazon.com, Inc. (NASDAQ:AMZN) has launched a new service called Instant Pickup which the company is believed to be using to compete more effectively against its rival Wal-Mart Stores Inc (NYSE:WMT).
Over the past few months, Amazon has been making moves to strengthen its presence in the groceries business. Just two months ago, Amazon announced its acquisition of Whole Foods Market, Inc. (NASDAQ:WFM) in a deal reportedly valued at $13.7 billion. The acquisition and the recent announcement about Instant Pickup means that the company plans to compete more effectively against Walmart.
Amazon is punching into an industry that has been immune to e-commerce
Amazon’s decision to push more aggressively into the groceries delivery industry is quite an interesting move. It highlight’s the e-commerce giant’s desire to dominate more industries. The groceries business is considered one of the most challenging industries for the company especially because it has previously been considered immune to e-commerce.
“We believe the key benefit of this service for Amazon will be enticing customers to use its platform for buying daily essentials and perishables, in addition to the products it is more often used for currently,” stated Forbes analysts.
It is however clear that the service will be a strong move for Amazon against brick and mortar services that are in the groceries business. Amazon is trying to bridge the gap between its online business with offline shopping by offering the same level of convenience to shopping for perishables.
Instant Pickup has a huge potential for growth and could end up attracting more shoppers especially if the company expands the list of items available for the service. It might especially be attractive to shoppers who purchase products from brick and mortar stores. This presents a huge threat to brick and mortar giants such as Walmart because Amazon could end up poaching the customers. Amazon’s massive capacity is also expected to give shoppers confidence to shop online for groceries and this will be a good thing because it will potentially speed up the growth of the service.
Amazon stock closed the latest trading session on Friday at $958.47 after a 0.22 percent loss from the previous close.
