Why Is Amazon.com, Inc. (NASDAQ:AMZN) Testing Drive-Up Grocery Service?

Why Is Amazon.com, Inc. (NASDAQ:AMZN) Testing Drive-Up Grocery Service?

Amazon.com, Inc. (NASDAQ:AMZN) is testing a drive-up grocery service in a bid to compete with Wal-Mart Stores Inc (NYSE:WMT).

Wal-Mart is betting big on the online grocery business. A recent report from Citi Research suggested that Wal-Mart looks to be in a best position “to capitalize on the next phase of growth in online grocery and take on Amazon,” CNBC reported.

Through its Fresh Pickup service, Amazon is offering customers to order unlimited groceries online, choose a time for pickup, visit the selected location, and pick up the items.

Shoppers will be able to pick up the groceries as soon as 15 minutes after they make their order. At an AmazonFresh pickup location, the company’s staff will be ready to load the groceries directly into your car.

Customers can order thousands of groceries including meat, dairy, and fresh produce, according to Amazon.

Amazon.com, Inc. (NASDAQ:AMZN) is offering this service free to Prime members only at this time. There is no minimum order limit. But the service is only available in Seattle. The online retailing giant may expand the service to other cities anytime soon.

Last week, Amazon.com, Inc. (NASDAQ:AMZN) launched an ultra-fast delivery service in Milwaukee for Prime members. The online retailing giant is offering Prime members in Milwaukee free two-hour delivery for tens of thousands of items.

Prime Now is part of Amazon Prime, a subscription service that gives users access to free shipping, streaming items and other benefits for a monthly or yearly fee.

Prime Now was launched in December 2014 in Manhattan, New York City. Amazon expanded the service to parts of Chicago, Miami, Baltimore, Dallas, Atlanta, Austin, Nashville, San Antonio, and Tampa in the United States.

Prime Now is also available in London, Birmingham, Newcastle, Manchester, Liverpool, Milan, Munich, Berlin, Paris, Barcelona, Madrid, and Tokyo.

In addition, Amazon is also betting on a drone delivery service. The online retailing is testing drones to deliver a five-pound package within 30 minutes or less. The e-commerce giant expects its Prime Air service to be operational before the end of this year.

Shares of Amazon.com, Inc. (NASDAQ:AMZN) were trading up 1.11% on Tuesday. The stock is up 14.17% year-to-date. Shares have gained 47.64% during the last 12 months.