Dive Brief:

• AmazonFresh launched Thursday in Las Vegas, according to a company press release. This will be the 16th city where the service is available.
• With AmazonFresh, customers can get groceries delivered within one to two hours of placing an order. Tens of thousands of products are available through the service, according to Amazon, including fresh meat and seafood, produce and household essentials.
• AmazonFresh is available as an add-on to Prime memberships and costs $14.99 per month in addition to the cost of Prime.

Dive Insight:

Prime Pantry. AmazonFresh. Whole Foods. Amazon Go. When it comes to grocery, it seems like Amazon is conducting one long, inconclusive experiment. Although the e-commerce giant has offered some type of grocery service for more than a decade, it has yet to offer a consistent, unified offering that is widely available to consumers.

AmazonFresh has been quiet since Amazon began removing the service from some markets in November of 2017. While it has remained active in major metros such as Chicago, San Francisco and Boston, it no longer operates in smaller markets. Meanwhile, Amazon has continued to roll out grocery delivery and pickup for Whole Foods. Nearly 90 U.S. metros have Whole Foods delivery, while about 30 have grocery pickup.  

There is no clear explanation for why the company chose Las Vegas for its latest rollout, though the city is growing rapidly. It is also dubbed the 25th best city to live in for people who love Amazon, according to an 2018 analysis from packaging company Shorr. The analysis found that Las Vegas has four Whole Foods locations and one Prime hub, which speeds up delivery capabilities in the metro area.  

Consumers may question the pricing for AmazonFresh. The $14.99 monthly fee on top of a Prime membership is not enticing, though most grocery delivery services still have a per-delivery fee on top of the cost of groceries as well. For loyal Prime shoppers, the fee could be worthwhile, but cost-conscious customers who are satisfied with current options will need to see a significant value in order to give AmazonFresh a go.

Amazon is also keenly aware of the threat other companies pose to it as they outperform the company in grocery e-commerce. Earlier this week, Kroger began piloting 30-minute delivery in Cincinnati, and Walmart launched an unlimited grocery delivery service for $98 a year. Target expanded the availability of its Shipt same-day service. If Amazon wants to have a fighting chance against these retailers, it will have to figure out its own grocery service once and for all.