Can Amazon succeed at grocery delivery?
Amazon.com is getting fresh with its customers in Seattle by delivering their groceries. The new service, AmazonFresh, promises next-day delivery of groceries, including fresh produce, to customers’ homes within a one-hour window. A temperature-controlled tote keeps the food fresh. If this sounds familiar, it’s because several others have tried and failed to make variations of this business model work over the years. Whether people think it’s a good idea or a bad one, most agree materials handling technology and logistics excellence are the challenges. “If I can make three deliveries every block, I’ll make a fortune. If I’m driving 5 miles between each delivery, I’ll lose a fortune,” says Jim Tompkins, president and CEO of Tompkins Associates, a supply chain consulting firm based in Raleigh, N.C. “You’re dealing in a business with very small margins, then you’re adding a very expensive activity. Scheduling the appointment is the challenge.” Will Amazon’s refrigerated totes make appoint
