Amazon's Whole Foods delivery service is off to a roaring start — and it's a huge threat to Instacart

  • Amazon is now offering two-hour deliveries from select Whole Foods stores through its Prime Now service.
  • Amazon couriers are already outnumbering couriers from Instacart at one Whole Foods store in Austin, an employee told Business Insider.
  • The service will be rolled out nationwide, which could threaten Instacart's business in Whole Foods.


Amazon started offering customers two-hour deliveries from select Whole Foods stores last week.

The service is still limited to only a handful of stores, but it appears to be off to a roaring start.

7 shock-worthy facts about Amazon:

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7 shock-worthy facts about Amazon
7.5 percent of Seattle's working-age population are Amazon employees

Amazon has more than 300,000 employees worldwide, and 40,000 in Seattle alone.

As a portion of the city's working-age population — roughly 528,000 — that comes out to 7.5% of the city working at Amazon.

For perspective, if the same portion of New York City's adults worked for one company, that company would have about 488,000 locals on staff.

Amazon accounts for 43% of all online sales

Amazon used to be a way to buy books online; today, it's the default buying site for just about everything, especially for people who have Amazon Prime.

An analysis by Slice Intelligence released in February found that 43% of all US online retail sales were done through Amazon in 2016.

That's up from 33% in 2015 and 25% in 2012.

1 out of every 4 US adults has Amazon Prime.

Speaking of Amazon Prime, the company now counts approximately 63 million people among its subscriber base, or about 25% of the total US adult population.

That number may underestimate the true coverage, however, since it doesn't account for multiple adults in one household all sharing the same Prime account.

Amazon ships 1.6 million packages a day

Amazon fulfillment is a beast of its own.

A report from 2013 (the latest year for which data are available) found Amazon shipped 608 million packages that year, or 1.6 million packages a day.

As of 2015, Amazon estimated its fulfillment centers were within 20 miles of 31% of the US population, and within 20 miles of 50-65% of its core, same-day-accessible market.

That's enough cardboard to span all of West Virginia

A back-of-the-envelope calculation reveals all those packages (not including padded envelopes) yield roughly 26,400 square miles of cardboard.

The total land area of West Virginia, meanwhile, is just north of 24,000 square miles.

Given the speed of Amazon's shipments, the company could blanket the whole US in cardboard in about five months.

45,000 robots roam the floors of Amazon's warehouses

To help those shipments leave the warehouses on time, Amazon relies on a growing fleet of autonomous robots that fetch packages from their shelves and bring them to human employees.

The 45,000 robots live across 20 fulfillment centers in the US. In 2016, the company increased the fleet 50% from its prior head count of 30,000.

Amazon is more valuable than all major brick-and-mortar retailers combined

The sum total of those investments in infrastructure and supply chain management have made Amazon by far the most valuable retailer in the United States.

Amazon's $356 billion valuation is so big, it's larger than Wal-Mart, Target, Best Buy, Macy's, Kohl's, JCPenney, and Sears combined.

With the recent acquisition of Whole Foods, there are no signs the retailer has any plans of slowing down.

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At one Whole Foods store in Austin, Amazon couriers are already outnumbering couriers from Instacart, an employee at the Austin store told Business Insider.

Instacart signed a five-year deal in 2016 to become Whole Foods' exclusive delivery service. The company is now competing with Amazon couriers since Amazon purchased Whole Foods last year in a $13.7 billion deal. 

This is bad news for Instacart, which has higher fees than Amazon's delivery service. 

Instacart costs $11.99 for one-hour delivery or $9.99 for delivery within two hours or more, though prices can increase at particularly busy times. 

Shoppers can also pay $149 annually for a membership that gives them unlimited free two-hour delivery on orders costing more than $35. 

10 grocery habits to master before turning 30:

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10 grocery habits to master before turning 30

1. Never buy a “single” thing! 

Yes, you may be the only occupant in your studio apartment but grocery items like yogurt, tissues, paper towels, ice tea, potatoes, and apples can be purchased in bags or multipacks. It almost never pays to buy singles, which can boost your cost by 40% or more. Put those dollars towards a happy hour!

2. Make your own snacks.

The price premium can be huge on snack-sized items. Instead, buy the largest size available (which is typically the best deal—always check unit prices and search for coupons and deals on Flipp!) and make your own snack sizes. For example, ounce per ounce, a regular container of Jif peanut butter costs 40% less than Jif To Go singles. Make your own singles with tiny plastic Tupperware. You can use the same method with yogurt, cottage cheese, and fruit cups. And use plastic baggies for chips, pretzels, candy, and other snacks that are often sold in single-serve packaging at a big premium.

3. Don’t ignore the clearance racks. 

Yes, even in supermarkets! They might look like a jumble of stuff you don’t need. But stores are always clearing out inventory to make room for new products and the markdowns can be 50% or more. Just be sure to check expiration dates and search for available coupons to save even more money.

4. Check circulars. 

If you don’t use the weekly local ads to plan your shopping trip, you’re shopping blind! The circulars can help you decide where to shop and what to buy—saving you hundreds of dollars a year. Make it easy by downloading a shopping app like Flipp, which puts all the weekly local ads at your fingertips so you can browse them all in one place. Even better, use Flipp’s Shopping List feature, which automatically shows you all the local deals for the items on your list.

5. Plan your meals. 

Meal planning itself can save you 50% on your weekly food bill. Not only does it help you save on your weekly food bills, it also keeps you from eating out as much, saving you even more money! Simply plan your meals for the week around the "loss leaders" which are the items on the front and back pages of your weekly circular. Eat what meat is on sale and produce that is in season, then plan what you are going to eat on each night. Pack leftovers for lunches and you have even more savings!

6. Ask for a rain check.

Always ask for a rain check if an item is on sale and out of stock. A rain check entitles you to the sale price when the item is back in stock. Most rain checks do come with time limits so read the fine print. If you had intended to buy multiple of the item, make sure that is noted on the rain check.

7. Don’t go coupon crazy.

Coupons can save you big bucks and you shouldn’t shop without them—if you use them for stuff you actually need. The problem is that while many of us make a list and try to stick to it, we also tend to indulge in “off-list purchases” triggered by coupons and other promotions. A study by NPD showed that 80% of unplanned supermarket purchases are due to promotions. One trick is to make a game out of limiting impulse spending. For example, you can set aside a “mad money budget” of, say, $5 a week for those sale items you just can’t resist.

8. Skip the prepackaged foods

Sure a prepackaged dinner saves you time when you’re exhausted and those pre-made treats make packing lunches easier, but prepackaged foods cost more money than their homemade counterparts. If you want to save money, make muffins from scratch or cook extra at dinner and freeze the leftovers. Skip the prepackaged items to save your budget and your waistline, too.

9. Go to the Grocery store ONE time per week. 

If you haven’t been planning your meals then chances are you have been making extra trips to the grocery store to get items you need for dinner. Those trips for “just a couple of things” always add up to more than you planned. They also add up to extra money you hadn’t planned to spend.

10. Use your store loyalty programs. 

Gather information about a store’s loyalty programs to see what kind of savings you might be able to unlock. Some stores will require a loyalty card in order to receive sale prices. Many also offer incentive programs like gas savings when you spend a certain amount on groceries. You want to be familiar with the perks of your grocery store loyalty program so you can maximize these savings. There may also be limited time promotions.

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Amazon Prime Now, on the other hand, costs $4.99 for two-hour delivery and $7.99 for one-hour delivery. Orders costing more than $35 are delivered for free within two hours. Shoppers must be members of Amazon's Prime service, which costs $99 annually, to access Prime Now.

Amazon Prime Now not only has the benefits of being cheaper than Instacart: it's also getting more in-store marketing in its test markets.

Part of the Whole Foods store on Domain Drive in Austin has been turned into a storage area for Prime Now orders. The area has checkout registers for Prime Now couriers, as well as coolers and shelving for prepared orders.

The area also functions as an advertisement for the delivery service, with ample signage marketing the new service.

The Amazon delivery test is currently limited to customers in Austin, Cincinnati, Dallas, and Virginia Beach, and it will be expanded across the US this year. 

Here's what some customers are saying about the new service on social media:

 

 

NOW WATCH: Take a look inside Amazon's grocery store of the future — there are no cashiers, registers or lines

 

See Also:

 

 

SEE ALSO: 'We can only take so much abuse': Whole Foods suppliers slam 'hellacious' new policies and say rising costs are hurting business

 

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