Amazon's been offering local delivery of fresh groceries in select Seattle neighborhoods since the 2007 launch of AmazonFresh. It's been slow to expand outside its comfort zone, and understandably so. It lacks a physical distribution presence in most of the country.
However, Amazon did introduce an AmazonFresh app for smartphones yesterday. Customers will now be able to shop at Amazon's virtual supermarket on the go. GeekWire is intrigued because the app came out for Microsoft's
I'm not surprised. Roughly a dozen miles separate Amazon's Seattle hub from Microsoft's Redmond campus. Washington companies may as well stick together. It would make sense that many existing AmazonFresh customers are loyal to the local Mr. Softy -- down to their cell phones.
What does intrigue me is that Amazon would bother to go through all of the trouble of creating an app for a service that's very limited geographically. This is the kind of move that would make sense only if Amazon is planning to expand AmazonFresh into new markets.
Holy Webvan! AmazonFresh is going national?
Not so fast.
There's no way that Amazon is stealthily building up a network of grocery-distribution hubs in major metropolitan markets. It already has enough state sales-tax deflecting to do before laying down an anchor in new areas. However, it's also quite possible that Amazon, after four years of nailing the nuances of fresh-grocery distribution, could team up with regional grocers that are looking for a way to dive into this promising niche without losing their skirt steaks.
Forget the dot-com residue left behind by Webvan, Peapod, and other upstarts that were unfashionably early. Amazon's been working on this in a small local market for years. It's had four summers to abandon this labor-intensive initiative if it didn't believe in its scalable upside.
I don't have any sources at Amazon. I'm just reading the tealeaves that I found in Virtual Aisle Four. Yesterday's app rollout has to be the beginning of something big. Why put out a smartphone application that will frustrate most who download it after they realize that the service isn't available to them?
The launch of the app also validates AmazonFresh, telegraphing an expanding support on new platforms.
One way or another, Amazon is going to get a carton of eggs to your door, sooner rather than later.
Will Amazon be able to expand AmazonFresh outside Seattle? Share your thoughts in the comments box below.
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Longtime Fool contributor Rick Munarriz has been shopping online since the early 1990s, even before Amazon.com was around. He remembers when his local Publix had a short-lived online service. He owns no shares in any of the stocks in this article and is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. The Fool has a disclosure policy.