Tech

Amazon is making two-hour grocery delivery free for all Prime members

Key Points
  • Amazon Prime members will now be able to get two-hour grocery delivery for free.
  • Until now, Prime members had to pay an additional $14.99 per month to get access to Amazon Fresh, the company's grocery delivery service.
  • The change reflects Amazon’s growing delivery efficiency, as it looks to shorten delivery time — which in turn leads to more frequent purchases and bigger spending.
Amazon Fresh insulated grocery delivery bags on front porch closeup
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Amazon just added a new perk to its popular Prime membership program: free grocery delivery.

Amazon announced on Tuesday that it will start delivering grocery products within a two-hour window to all Prime members living in the 2,000 regions eligible for the service. That means Prime members, who pay $119 per year in the U.S. for free shipping and other benefits, like Prime Video and Music, will now also be able to get free grocery shipments for products ranging from fresh meats and veggies to snacks.

Until now, Prime members had to pay an additional $14.99 per month to get access to Amazon Fresh, a separate program that offered free two-hour grocery delivery. Amazon's VP of Grocery Delivery Stephanie Landry told CNBC that groceries have been one of the fastest growing segments at Amazon, and the new program would effectively make Amazon Fresh a free benefit for all Prime members.

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"I think that this offering is truly a game-changer and that this is going to grow into one of the most beloved benefits of Prime," Landry said.

The change reflects Amazon's growing delivery efficiency, as it looks to shorten delivery time — which in turn leads to more frequent purchases and bigger spending. Amazon has pledged to make one-day delivery the default for all Prime members this year, and is spending billions of dollars in growing its warehouse footprint and delivery infrastructure.

It also shows Amazon's continued effort to make its Prime membership more appealing. Amazon now has over 100 million Prime members worldwide, but there's been concerns of slowing growth as the size of the addressable market shrinks.

The new grocery delivery benefit, meanwhile, will be introduced in phases, the company said. It will launch as an invite-only service, starting with Prime members that currently use Amazon Fresh or those who have previously ordered deliveries from Whole Foods. Other Prime members can enroll in the program by requesting the invitation.

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Amazon's Landry declined to give a timeline for when free grocery delivery will be rolled out to all Prime members without an invite. She added "tens of thousands of products" from Whole Foods and Amazon Fresh are available through the new program.

"Every time we invest in the services that customers love, we expect that to grow sales for sure," Landry said. "We're really happy in investing in this offer so that Prime members are using us even more."

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