Amazon Pulls The Plug On Prime Pantry

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It looks like another bit of consolidation in the wild world of grocery retail as Amazon has officially shut down its Prime Pantry services — rolling the shelf stable goods lineup to the main Amazon Website where they will be adorable as part of the general listing.

Launched initially in 2014, Prime Pantry orders cost consumers a flat $5.99 shipping fee per box of groceries, which could be filled with up to 45 pounds of products or up to 4 cubic feet of stuff (whichever limit customers reached first). The program was designed to incent consumers to use Amazon to stock up on everyday items that would otherwise be expensive to ship due to their bulk. In 2018 the program was updated to include a $5 a month subscription over top regular Prime membership that allowed unlimited Pantry orders each month so far as consumer ordered a total of $40 or more.

Prime Pantry, of course, exits a very different landscape than it entered in 2014. Amazon had not yet purchased Whole Foods, released Amazon Fresh grocery stores nor its cashier-free convenience store concept at that time — and its foray into the grocery market was still extremely immature and underdeveloped. Those changes have in turn changed Amazon’s entire approach to its grocery business as its ambitions and holdings have expanded.

In late 2019 for example, Amazon changed its longstanding Fresh program, once a separate subscription to Amazon Prime, into an included add-on feature. In describing why Amazon dropped the approximately $15 monthly fee and converted in into a complimentary benefit, Stephenie Landry, VP of grocery delivery, noted that given the program’ popularity with Prime members, it was a natural fit for extension as a mainline benefit.

“Grocery delivery is one of the fastest growing businesses at Amazon, and we think this will be one of the most-loved Prime benefits,” Landry said. The firm pointed out that members now get fast as well as free grocery delivery from Whole Foods Market and Amazon Fresh.

The firm also said, “Customers are hungry for options that help them solve for both weekly meal planning and the moments when they need groceries in a pinch. Fast and free grocery delivery with Amazon Fresh and Whole Foods Market accomplishes both those needs.”

The rollback of Prime Pantry seems to issue from a similar motives — Pantry once served as a mechanism for helping Amazon compete with stores, and now that Amazon is a grocery store owner itself and building an increasingly centralized and last-mile focused delivery network, Pantry is out of date with the brand’s current competitive offerings, and unlike Fresh not quite as readily retooled.

And a retooling, the latest PYMNTS Omnichannel Grocery Report demonstrates, is necessary as the grocery store, once a consumer experience dominated by a preference for physical shopping, has in 10 short months become increasingly omnichannel. According to the survey data, 63.9 percent of consumers have recently made at least grocery purchases online. Consumer packaged goods are digitizing faster than their perishable counterparts, the data demonstrates, but the figures are picking up across the board.

Moreover, a critical component of that digital shift, according to the data, is the growing dominance delivery is showing in the market as a consumer-preferred way to get their household staples.

Some 22.7 percent of grocery shoppers report ordering groceries online to be delivered at home more now than they did before the pandemic. It is a narrow lead, as 21 percent report doing curbside pickup of digital orders more now than they did in a pre-pandemic world. But it is still a lead — and a staggering one since of the two options, curbside pickup remains the more common offering.

It is also notable that when it comes to grocery, both delivery and curbside markedly lead buy online, pickup in store (BOPIS), which 11.9 percent are doing more often now than they did before.

Consumers are ordering their groceries online more than ever, and having them delivered when they can. Unlike the early days of Prime Pantry, no one needs to be convinced to wade in with non-perishables to get a feel for something different — the COVID-19 pandemic pushed everyone into the digital grocery deep end without warning a little under a year ago.

Prime Pantry is now moving on, as consumers no longer need training wheels — they need faster digital options for all aspects of the shopping trip, not just the CPG pantry items.

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