Target integrates Shipt’s same-day delivery service into its mobile app

Same-day delivery is coming to Target’s app. The retailer announced this morning that its same-day shopping service Shipt, which Target acquired two years ago for $550 million, will now be integrated directly into the Target mobile application. Though Shipt is widely known as an online grocery service that competes with Instacart and others, Target is putting the service to work to do more than deliver food and various household items.

Instead, Shipt is turning into Target’s own version of Amazon’s Prime Now. Currently, Target shoppers can order 65,000 items from the app for same-day delivery, including not just groceries and essentials, but also toys, baby-care products, kitchenware, and more. For comparison’s sake, Amazon says Prime Now offers “tens of thousands” of products for one or 2-hour delivery. Shipt may not have quite as tight windows, however — just “same-day.”

While Amazon doesn’t disclose how many exact products are available via Prime Now, as it varies by location, a 2018 study indicated that Amazon’s biggest markets offered around 55,000 Prime Now products per city, while many other cities offered 34K-41K SKUs.

Unlike Prime Now, Shipt doesn’t require a membership, though one is available. Instead, shoppers can opt to pay a $9.99 delivery fee per same-day order. This is similar to how Walmart Grocery operates, though it’s now rolling out a subscription option for its more regular customers.

Shipt’s integration with the Target app doesn’t mean the dedicated Shipt app is going away — that’s still a more convenient experience for shopping groceries at this time. However, it is a way for Target to offer Shipt delivery to a wider customer base of mobile consumers.

The mobile integration follows the launch of a dedicated shopping site for same-day delivery on Target.com earlier this year, which had a similar goal.

Target has been steadily modernizing its business to better compete with Amazon and help customers shop however they want — in-store, online or some hybrid of the two, as with Drive Up orders. In less than two years’ time, Drive Up became a top-rated service and it more than doubled the number of 2018 orders by fulfilling more than 5 million orders in the first part of the year, for example. Meanwhile, Target recently said that 1 in 5 customers were placing same-day orders with Target for the first time in Q2, indicating the potential for growth in same-day.

The same-day Shipt integration is rolling out today in the Target app which also includes a new “My Store” tab where shoppers can convert lists to a shopping cart with a “Delivery” button. A “Discover” also helps them to navigate and find other features, like deals and seasonal content.

Target tells us same-day delivery is now available in nearly 250 markets across 48 states.

Target integrates Shipt’s same-day delivery service into its mobile app

Same-day delivery is coming to Target’s app. The retailer announced this morning that its same-day shopping service Shipt, which Target acquired two years ago for $550 million, will now be integrated directly into the Target mobile application. Though Shipt is widely known as an online grocery service that competes with Instacart and others, Target is putting the service to work to do more than deliver food and various household items.

Instead, Shipt is turning into Target’s own version of Amazon’s Prime Now. Currently, Target shoppers can order 65,000 items from the app for same-day delivery, including not just groceries and essentials, but also toys, baby-care products, kitchenware, and more. For comparison’s sake, Amazon says Prime Now offers “tens of thousands” of products for one or 2-hour delivery. Shipt may not have quite as tight windows, however — just “same-day.”

While Amazon doesn’t disclose how many exact products are available via Prime Now, as it varies by location, a 2018 study indicated that Amazon’s biggest markets offered around 55,000 Prime Now products per city, while many other cities offered 34K-41K SKUs.

Unlike Prime Now, Shipt doesn’t require a membership, though one is available. Instead, shoppers can opt to pay a $9.99 delivery fee per same-day order. This is similar to how Walmart Grocery operates, though it’s now rolling out a subscription option for its more regular customers.

Shipt’s integration with the Target app doesn’t mean the dedicated Shipt app is going away — that’s still a more convenient experience for shopping groceries at this time. However, it is a way for Target to offer Shipt delivery to a wider customer base of mobile consumers.

The mobile integration follows the launch of a dedicated shopping site for same-day delivery on Target.com earlier this year, which had a similar goal.

Target has been steadily modernizing its business to better compete with Amazon and help customers shop however they want — in-store, online or some hybrid of the two, as with Drive Up orders. In less than two years’ time, Drive Up became a top-rated service and it more than doubled the number of 2018 orders by fulfilling more than 5 million orders in the first part of the year, for example. Meanwhile, Target recently said that 1 in 5 customers were placing same-day orders with Target for the first time in Q2, indicating the potential for growth in same-day.

The same-day Shipt integration is rolling out today in the Target app which also includes a new “My Store” tab where shoppers can convert lists to a shopping cart with a “Delivery” button. A “Discover” also helps them to navigate and find other features, like deals and seasonal content.

Target tells us same-day delivery is now available in nearly 250 markets across 48 states.

Wayfair’s app adds 3D visualization tools, including interactive photos & a room planner

Home furnishing retailer Wayfair was among the first to adopt AR technology as a means of helping people better visual furniture and accessories in their own home, ahead of purchase. Today, the company is expanding its feature set to allow for more visualization capabilities — even when you’re shopping out in the real world and aren’t able to take a photo of your room to use AR.

Instead, shoppers will be able to leverage a new feature called “Interactive Photo,” which lets shoppers take a photo of their room then visualize multiple products within it, even when they’re not home in their own space. The feature itself uses technology to understand the spatial information of the room in the image to give you an AR-like experience using your photo.

Alongside this addition, Wayfair has updated its app to put its camera tools more at the forefront of the app experience. Similar to how you can click a camera icon next to the Amazon app’s search bar, you can now do the same in Wayfair. You can also then toggle between the various camera-based features with swipe gestures, in order to move between Wayfair’s visual search and its “View in Room” AR feature, which is also where you’ll find the new “Interactive Photo.”

The retailer has also launched its room design tool, Room Planner 3D, on the mobile shopping app. This allows shoppers to create an interactive room 3D room that they can view from any angle, while testing out different layouts, styles, room dimensions and more.

The update follows Amazon’s launch earlier this year of its own visual shopping experience called Showroom, which let online and mobile shoppers try out furniture and other décor in a customizable virtual room where they pick the wall color, flooring, carpet and more.

“With the latest updates to the Wayfair app, we continue to push the limits of what’s possible by iterating on advanced AR and machine learning capabilities, and introducing new and innovative spatial awareness techniques to an e-commerce experience, bridging the gap between imagination and reality,” said Matt Zisow, Vice President of Product Management, Experience Design and Analytics at Wayfair, in a statement.

The new feature set comes shortly after Wayfair’s third-quarter earnings, where the company reported a wider-than-expected loss of $2.33 per share, adjusted, versus the expected $2.10 per share. Revenue was up 35% year-over-year to $2.3 billion, above the anticipated $2.27 billion, however. The company attributed the miss to “short-term headwinds from tariffs.”

However, as the holiday shopping season heats up, Wayfair still needs to unveil enticing features that will encourage consumers to redownload its app and shop — especially given that smartphones alone drove $2.1 billion in U.S. online sales last Black Friday.  

The new Wayfair app is out now on iOS and Android, but the new features — Interactive Photo, Integrated Camera and Room Planner 3D — are only on iOS.

Amazon to open its first non-Whole Foods grocery store in 2020

Amazon is opening its first non-Whole Foods grocery store in the L.A. neighborhood of Woodland Hills, the retailer today confirmed. The news of the new store was first reported by CNET, which spotted several job postings referencing the location including those for a zone leader, grocery associates, and a food service associate.

Unlike Amazon’s growing number of cashierless Amazon Go convenience stores, the new store will feature conventional checkout technology, says Amazon. CNBC also noted the store may be located in a former Toys R Us location at a shopping center.

Amazon declined to offer more details about its plans for the store or others like it, but did confirm it’s opening a grocery store in Woodland Hills in 2020.

The retailer’s plans to expand its grocery operations beyond its Whole Foods brand was previously reported by The Wall Street Journal in October. Amazon, the report claimed, was planning a chain of dozens of grocery stores across the U.S., beginning with sites in L.A., Chicago, and Philadelphia. Woodland Hills was mentioned as being among the first locations, along with Studio City and Irvine.

Other locations being scouted included those in the New York metro area, New Jersey and Connecticut.

Amazon’s interest in an expanded brick-and-mortar presence comes at a time when Walmart’s grocery business has been booming, with some reports claiming it now dominates those from rivals, including Amazon, Instacart, and others.

Walmart in Q2 reported 37% increase in e-commerce sales, supported by the strong growth in online grocery. Much of its success in that area can be attributed to the proximity of its stores to its customer base. With no markups on food prices (as some of its competitors do), it’s affordable to order from Walmart Grocery online, then drive to pick up the groceries — or pay a small fee to have them delivered.

Amazon’s Whole Foods, meanwhile, has long had a reputation as a more expensive store. Following the acquisition of the grocery chain, Amazon has tried to combat that notion with weekly sales and discounts for Prime members. But Whole Foods is still considered to be a more high-end store, and its prices continue to reflect that.

The new Amazon grocery stores, on the other hand, will be targeted at the mainstream consumer who typically shops from more traditional, or even value, grocery chains.

“When it comes to grocery shopping, we know customers love choice and this new store offers another grocery option that’s distinct from Whole Foods Market, which continues to grow and remain the leader in quality natural and organic food,” an Amazon spokesperson told CNET.

They said Whole Foods would continue to expand, despite the launch of the new Amazon grocery stores. Whole Foods opened 17 locations this year and has more planned, the company said.

 

Prosus makes $6.3B hostile bid for Just Eat; Just Eat rejects deal in favor of Takeaway merger

As Amazon-backed Deliveroo expands into click-and-collect and procurement services to grow its footprint with restaurants in Europe, a food fight among three other takeout and delivery players continues apace in an ongoing consolidation march to compete better against the likes not just of Deliveroo but also Uber Eats and more.

Today, Prosus — the recently-listed arm of Naspers comprising its extensive online assets (including a significant stake in Tencent) — said that it would be willing to pay £4.9 billion ($6.3 billion) in cash for Just Eat, one of the big players in the food takeout and delivery market in Europe. The bid is a hostile one: Just Eat has been in the middle of working on a combination with Takeaway.com, another large competitor in the market; and today Just Eat wasted no time in asking its shareholders to reject the Prosus offer.

“The Board believes that Just Eat is a leading strategic asset in the food delivery sector and the Prosus Offer fails to appropriately reflect the quality of Just Eat and its attractive assets and prospects, the benefits of first mover advantage in a consolidating sector, and the significant future upside available to Just Eat shareholders through remaining invested in Just Eat and the Takeaway.com Combination,” it noted in a statement. “The Board of Just Eat believes that the Takeaway.com Combination is based on a compelling strategic rationale that will deliver a number of strategic benefits and greater value creation to Just Eat shareholders than the terms of the Prosus Offer. Accordingly, the Board of Just Eat continues to unanimously recommend the Takeaway.com Combination to Just Eat shareholders.”

Prosus’ offer, which works out to 710 pence per Just Eat Share, is 20% higher than Takeaway.com’s offer of 594 pence (which itself was at a premium to Just Eat’s share price).

The Takeaway offer has been months in the making and has had a number of twists and turns. The first announcement for a $10 billion merger was made in July, but in the interim Prosus made its first hostile offer, and so the deal switched to a takeover this month in hopes of securing shareholder agreement faster.

At stake for all players is the fact that the delivery business continues to be a fast-growing but very crowded field, with a number of players operating unprofitably and hoping for consolidation in order to improve their economies of scale and margins. If economies of scale and better margins is the rock, the competition is the hard place: all three have a strong and very highly capitalised set of a pair of competitors in the form of Uber Eats and Amazon-backed Deliveroo, with a number of smaller but also fast growing startups continuing to crowd the field.

Just Eat and Takeaway.com have already done some consolidating of other operations. The latter two have gobbled up different parts of DeliveryHero’s European business in recent times. Prosus, meanwhile, has a 22% stake in the remaining DeliveryHero business (outside of Europe), alongside stakes in India’s Swiggy and iFood in Latin America. This would mean that Prosus taking over Just Eat would be less about consolidation of European holdings, which could be one reason why Just Eat is less keen on the idea.

Takeaway.com has also issued a response to the news, noting that it’s the only one of the three that has working on building profitability into the business: it’s currently profitable in the Netherlands, its home market, and is on track to getting there in Germany (a track it believes it can continue with more scale).

“Given the circumstances, I can fully understand that the current cash values of both our and the competing offer aren’t particularly appealing to the Just Eat shareholders, and seem to be quite far removed from the fair value of Just Eat. We do however believe that the agreed merger ratio between Just Eat and Takeaway.com is appropriate,” noted Jitse Groen, CEO of Takeaway.com, in a statement. “Takeaway.com now operates in two out of the world’s four major profit pools. Including the UK, the Just Eat Takeaway.com combination will therefore operate in three out of the four major profit pools globally available. This in stark contrast with most other food delivery websites, which are loss-making, and in our opinion, will likely never become profitable.”

It seems that Naspers’ Prosus says that this is its last and final offer for Just Eat, but this is unlikely to be the final word on how food delivery and takeout will play out in Europe (or globally).

The market is still largely operating in the red globally — and even the most established players, like GrubHub, are not seeing much stability. And with about half a dozen giant players operating in different markets, and lots of capital riding on each of them, we’ll be seeing a number of deals and product expansions — for example the emergence of more “virtual” kitchens other added services such as restaurant procurement — before it’s all gravy for this industry.

Uber is entering the ads business

Uber will become an ad platform, selling space inside its Eats app to restaurants hoping to lure in more food delivery orders. A recent Uber job listing spotted by TechCrunch seeks an Uber Eats Ads Lead “to lead the team and efforts responsible for creating a new ads business that enables eaters to discover new foods and restaurants to grow their customer base.”

An Uber spokesperson confirmed the company would be entering the ads business, telling TechCrunch “We are exploring relevant ads in Eats.” Selling ads could help it improve margins on Eats, where it only takes 10.7% of gross bookings as adjusted net revenue since it pays out so much to restaurants and drivers.

The fresh opportunity in ads comes at a critical time when Uber is desperate to show its future potential in the face of a sagging share price that closed at $28.02 yesterday, down 40% from a high of $46.38 in June. Today, Uber’s post-IPO stock lock-up expires and early investors are able to sell their shares, putting newfound pressure on its stock.

TechCrunch was the first to discover a prototype of Eats ads in Decembe called Specials, where restaurants could get featured placement in the app in exchange for offering a discount. This demonstrated Uber’s ability to steer hungry users to order from particular restaurants.

I followed up with Uber’s senior director and head of Eats product Stephen Chau, who hinted at the company’s aspiration in the ads business. “There’s a bunch of different ways we can work with restaurants over time. If we have all the restaurants on the marketplace and we give them tools to help them grow, then this will be a very efficient marketplace. They’re going to be spending those ad dollars somewhere,” Chau told me. We’ve been checking on the company’s progress in ads ever since.

As we predicted, now instead of just a quid pro quo where Uber exchanges added visibility to restaurants willing to offer discounts that could keep users loyal to Uber Eats, it plans to formally sell ads.

“As this is a brand new space for Uber” the Toronto-based Eats Ads Lead “will be responsible for defining the vision for this new product area and determining where to start building.”

The job listing also notes whoever takes the role will “Help formulate our business, product and go-to-market strategy for ads” and “Creatively experiment and quickly iterate on early tests”. Signaling global ambitions for Eats ads, the Lead will “Customize and scale this offering across the world.”

The effort is separate from Uber’s own marketing efforts that see it spend over $1 billion per year to recruit riders, drivers, and Eats customers. Uber will start selling the ads, not just buying them.

The potential for Eats ads stems from Uber’s place as a destination for choosing what to eat, not just ordering it. Wherever there is discovery, there are opportunities for paid discovery. And as Uber focuses on cross-promoting Eats inside its main ride hailing app, it could suck in more users that are open to suggestions that restaurants pay to provide.

We don’t have details on exactly how Uber’s ads will look. However, you could imagine them appearing on the home page, the browse section, or even in search results for certain cuisines or restaurants. Restaurants hoping to boost orders could pay to appear to users who are hungry but don’t know what they want to eat, or to appear before competitors in the same food style.

Amazon successfully navigated a similar expansion from marketplace to ad platform. eMarketer expects Amazon’s US ads business will grow 33% this year to reach $9.85 billion, and claim 7.6% of the total US ad market which makes it the biggest search ad player behind Google.

Uber could use any revenue it can get. This quarter the company lost $1 billion, with $316 million of that loss coming from Eats. But Eats’ revenue grew 64% year-over-year, showing it’s increasingly popular, and could command enough user attention to make advertising lucrative.

Ads could also serve as a wedge for Uber to move deeper into business intelligence services for restaurants. It could apply its data on food delivery demand to help kitchens to optimize prices, allocate staff, and improve menus.

To save its share price, Uber’s best bet is to find new streams of cash it doesn’t have to share with drivers or restaurants. It may still be years until self-driving vehicles arrive to rescue Uber from its tremendous costs.

Shopify expands into email marketing

Shopify continues to expand beyond its core e-commerce platform with a new product called Shopify Email.

Shopify’s chief product officer Craig Miller and director of product for marketing technology Michael Perry gave me a quick demo of the product yesterday; Miller argued that they’ve created “the first email product designed for ecommerce.”

That means it’s integrated with a merchant’s store on Shopify, allowing them to easily pull their brand assets into their emails, along with product content and listings. They can also see whether those emails actually lead to customers to add products to their carts/purchase them. And they can create customer segments based on the data in Shopify.

“What we’re really proud of here is, we become the expert for them,” Perry said. “Most people we’ve surveyed don’t understand the value of segmentation, so we’ve taken the liberty of assembling the right list to add value for them.”

Shopify Email is currently available as an early access test for a limited group of merchants, ahead of a broader rollout next year. Miller said it will be free for these initial merchants, with general pricing to be announced later.

Other recent additions to Shopify’s product lineup include hardware for brick-and-mortar stores and digital ad tools.

“The common thread among all of [our new products] is to help brands sell directly to their customers,” Miller said. “There’s been a lot of talk lately about direct-to-consumer, but that’s something we’ve doing for a decade and a half without calling it that.”

Amazon now sells movie tickets in India

Amazon has set its eye on the next business it wants to disrupt in its key overseas market India: online movie tickets. The e-commerce giant said Saturday it has partnered with local online movie ticketing giant BookMyShow to introduce booking option on Amazon India shopping site and app.

The move comes months after the e-commerce giant began offering flight ticketing option in the country as it races to turn its payments service Amazon Pay into a “super app” — a strategy increasingly employed by players in emerging markets such as India.

Starting today, Amazon users in India can book movie tickets from the “movie tickets” category under “shop by category” on the shopping site or through the Amazon Pay tab, the e-commerce firm said. BookMyShow, which leads the online movie ticketing market, is the exclusive partner for this new offering, the two said.

To gain market share, Amazon said its credit card users in India will get a 2% cashback on each movie ticket purchase. Until November 14, it will also offer a cashback of up to Rs 200 on each ticket purchase.

Neither of the parties disclosed who will foot this cashback. However, BookMyShow is likely paying Amazon a fee for tapping “millions” of customers the e-commerce giant has amassed in the country.

For its flight ticketing service, Amazon India partnered with Cleartrip . Balu Ramachandran, SVP at Cleartrip, told TechCrunch in an interview earlier that the company was paying a promotional fee to Amazon, but declined to offer specifics.

An Amazon India spokesperson declined to comment on the financial arrangements of this five-year partnership.

BookMyShow, which employs 1,400 employees, sells about 15 million tickets each month. The service, which has a presence in over 650 towns and cities, today counts heavily-backed Paytm as one of its biggest rivals. Paytm, which entered the movie ticketing business three years ago, has been able to eat some of BookMyShow’s market share by offering cashback on each ticket purchase.

The media and entertainment business in India is worth $23.9 billion, a report from EY-FICCI said in March this year, which noted that consumer spendings on the web is increasingly growing. More than 50% of all tickets sold by the top four multiplex chains in the country in recent years have occurred on the web.

Ashish Hemrajani, founder and CEO of BookMyShow, said through the partnership the company will be able to access Amazon India’s “deep penetration across tier 2 and tier 3 cities.”

Mahendra Nerurkar, Director of Amazon Pay, said today’s partnership shows Amazon’s commitment to “simplify the lives of our customers in every possible way — as they shop, pay bills, or seek other services.”

Last month, Amazon introduced a new feature that allows Amazon Pay users to pay their mobile, internet, and utility bills. This is the first time Amazon is offering these functionalities in any market — it plans to bring this to the U.S. in coming months.

Amazon has been quietly expanding its payments offering, built on top of local banks-backed UPI payments infrastructure, in the country. Unlike its global rivals Google and Walmart that offer standalone apps for their payment services and also focus on transactions among customers, Amazon has kept Pay integrated with its e-commerce offering and focuses on consumer-to-business transactions.

The company maintains tie-ups with several popular Indian online services and frequently offers cashback to incentivize users to pick Amazon Pay over other solutions. Earlier this week, Amazon pumped about $634 million into its India business.

Walmart Grocery now offers curbside alcohol pickup at 2,000 US stores

The online grocery wars continue. Amazon this week just made grocery delivery free, so Walmart is now touting how its grocery service offers the booze. The retailer today announced a new milestone in terms of giving its customers the ability to shop for alcohol online, noting that more than 2,000 Walmart locations across 29 states will now let you pick up wine and beer along with your other grocery purchases.

The alcohol pickup service has to abide by local laws, which limits its expansion in some cases.

In addition, Walmart says that now more than 200 stores in California and Florida are also offering alcohol delivery. It plans expansions on this front, as well.

Walmart has been slowly ramping up its online alcohol shopping options for some time, in accordance with local, county and state regulations. Its Sam’s Club subsidiary has offered this option, too, by way of Instacart. In the latter case, Sam’s Club has been able to offer delivery of spirits, like Tito’s vodka or those from Sam’s Club’s own “Member’s Mark” brand, among others.

Today, there are a number of ways to shop alcohol online, depending on where you live.

Target-owned Shipt delivers alcohol from some of its supported retailers (including Target) in some markets. Instacart, BJ’s and Amazon (Prime Now) do as well, in select cities, states and stores. And finally, services like Drizly, Saucey, Postmates and Uber Eats can help fill in the gaps, in some markets.

The problem with all these services is that consumers often don’t know which retailers offer alcohol delivery, or which app they should use. If you live in a more permissive state, this may not be as big of a problem — you’ll likely encounter an abundance of choices for same-day alcohol delivery. But in a more conservative state, your options may be more limited — or not available at all. And when consumers have to launch a half dozen apps just to figure out how to order booze online, most people will just give up and drive to the store.

That’s in conflict with Walmart’s larger goal, which is to allow shoppers to take advantage of its online grocery shopping to fully replace the traditional grocery shopping trip to the store. After all, if consumers are driving to the store, they’ll likely choose their local grocer, not necessarily Walmart.

To meet the needs of the online shopper, Walmart Grocery has to offer it all — not just food, but also adult beverages. If successful on speeding this option to market, Walmart’s brand could become known as the place to order online everything you need from the grocery store. And that, in turn, could help boost sales.

Walmart’s alcohol shopping feature works just like shopping for groceries — you search for what you want, add it to the cart, then check out. The only difference is that, upon pickup or delivery, you’ll be required to show your ID so the Walmart team member can verify your age.

Alcohol pickup is available in big states like California, Florida and Texas, and dozens of others, while delivery is limited to the first two states, for the time being.

Amazon axes $14.99 Amazon Fresh fee, making grocery delivery free for Prime members to boost use

Amazon is turning up the heat once again in the world of groceries, and specifically grocery delivery, to make its service more enticing in face of competition from Walmart, as well as a host of delivery companies like Postmates. Today, the company announced that it would make Amazon Fresh — the fresh food delivery service it now offers in some 2,000 cities in the US and elsewhere — free to use for Prime members, removing the $14.99/month fee that it was charging for the service up to now.

Alongside free delivery, Amazon is giving users one and two-hour delivery options for quicker turnarounds, and it’s making users’ local Whole Foods inventory available online and through the Amazon app.

Prime members who were already using Amazon’s grocery delivery services — either for Amazon’s own-branded service or to get Amazon-owned Whole Foods shopping delivered — will continue to get these, now free. Prime members who might be interested in trying this out for the first time will have to sign up here and wait for an invite. (“Given the rapid growth of grocery delivery we expect this will be a popular benefit,” Amazon explained about the waitlist.)

“Prime members love the convenience of free grocery delivery on Amazon, which is why we’ve made Amazon Fresh a free benefit of Prime, saving customers $14.99 per month,” said Stephenie Landry, VP of Grocery Delivery, in a statement. “Grocery delivery is one of the fastest growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits.”

Making Amazon Fresh free is the latest price tinkering (and reduction) that Amazon has made to drive more usage of the grocery service, while at the same time expanding the sweeteners it gives to consumers to sign up to Prime. The $14.99/month fee was introduced back in 2016, itself a reduction on a $299/year fee that Amazon previously charged Amazon Fresh customers. Before that, Amazon charged a $99/year subscription plus separate delivery fees to use the service.

It’s not clear how many customers are already using Amazon Fresh, or whether the service is profitable not for the company at this point. Notably, despite the boost of Amazon owning the Whole Foods chain of supermarkets, analysts earlier this year estimated that while Amazon was still seeing its grocery service growing, that growth was slowing. (To add to that, we’ve seen some consolidations that point to Amazon looking for ways to simplify — and reduce the cost — of its grocery shopping offering.)

Despite all this, in the US, about a year ago it was estimated in a separate report that Amazon accounted for about one-third of all grocery delivery in the US.

Grocery delivery is a tricky business, much more perishable than delivering a book or a piece of clothing or a piece of consumer electronics, but it represents, if done right, a frequently recurring line of revenue. Too add to that, Amazon has made fast and free delivery one of the major cornerstones of how it grows its business and attracts customers away from using other online shopping options, or visiting actual brick-and-mortar stores.

In other words, regardless of whether it is profitable or not, it makes sense that Amazon would invest in ways of trying to boost its grocery delivery service, making it free being perhaps the biggest boost yet (next stop: cash back when you use it?). It fits with the company’s more general economies-of scale approach: bring in more users buying more groceries, and make up the margins in the latter to offset potential losses in the former.

But the move to make deliveries “free” — free, that is, for those who are already paying $12.99/month or $119/year for Amazon Prime — is a classic Amazon move not just to boost its own usage numbers of the service.

The company is facing persistent competition from a number of other companies also providing online grocery shopping and delivery. In the UK, just about every large grocery chain offers this service directly (or through another non-Amazon partner). And in the US, Walmart announced just last month that it would be expanding its $98/year Delivery Unlimited service, which up until today would have been a cheaper deal than Amazon’s. Both Postmates and Doordash are among the delivery hopefuls who also have ambitions to make a dent in this area.