It’s a battle of the titans as Amazon and Google go toe-to-toe with same-day grocery delivery with Amazon Fresh and Google Express. Who will deliver your organic milk, eggs and kale the fastest?
Amazon Fresh, part of the company’s Prime Now program, launched in 2015 and serves select areas around the country – Seattle, New York, Northern and Southern California. Drivers drop of fresh orders in temperature-controlled bags within a one-hour delivery window, according to Tech Crunch, which also hints that Boston is next up for one-hour delivery, thanks to newly leased warehouse space.
CNET offered a look inside an Amazon Now warehouse in Manhattan.
Google Express just re-launched fresh delivery in select areas of Los Angeles and San Francisco, using retailers like Costco to provide the fresh orders. Google says this lowers their risk of spoiling inventory and the expensive upkeep of refrigerated warehouses.
A third player, Instacart, is making waves as it signed a five-year delivery partnership that makes it the exclusive delivery partner for Whole Foods’ perishable business. The solidifies the companies’ existing partnership that services 16 cities, but this new exclusivity edges out Google Express, which had once serviced Whole Foods, too. Like Google Express, Instacart doesn’t have distributions centers or stores; instead, the National Retail Federation reports that some 4,000 personal shoppers pick up goods for customers at participating retailers.
What does this mean for commercial real estate? Location, location, location – and urban spaces are in demand. Amazon is the definite leader here. Last fall, Amazon established three Prime Now hubs in Los Angeles and Orange County, getting items closer to their customers and expediting delivery. Prime Now properties are smaller, according to an article in NREI, ranging from 50,000-75,000 square feet.
Supply Chain Digest reports that Amazon opened 43 small urban distribution facilities in 2015, getting products closer to the consumer and enabling delivery to your doorstep in less than an hour. That’s just the tip of the iceberg: the article says, “Amazon will open an incredible 7.2 million square feet of new fulfillment center space in the US in the next two years, an investment of some $1.2 billion in fulfillment space alone.”