Potato, potahto, tomato, tomahto… Amazon Fresh, Amazon Prime Now… It’s all the same, right?

Recently, there has been a lot of discussion surrounding Amazon’s grocery delivery services after the company announced that it would be eliminating the additional fee for Prime members to use Amazon Fresh. With both services now being free for Prime members, it makes the already comparable programs even harder to distinguish in consumers’ minds. More importantly, CPG brands are trying to strategically maneuver themselves to gain access to what Amazon’s VP of Grocery Delivery Stephenie Landry says are “the fastest growing businesses at Amazon.”

This article discusses the differences between Amazon Fresh and Amazon Prime Now and explains why brands need different strategies to win on each compared to “regular” Amazon.com.

Amazon Fresh 101

Amazon started its ambitions of grocery dominance more than a decade ago when it started to test its delivery service Amazon Fresh in Seattle. Though the retailer’s recent grocery developments have been quite aggressive, it took six years before it expanded Amazon Fresh into an additional market in 2013. Today, Amazon Fresh is currently available in roughly 21 U.S. metro areas.

How do you access it? Amazon Fresh is accessible through the main Amazon.com website and mobile app in ZIP codes where the service is available.

Is there a delivery fee? Delivery is free on orders of $35 or more ($50 or more in New York City).

How quickly are orders delivered? Customers can schedule deliveries within two hours or pay an additional fee to get orders in as little as one hour.

What product categories are available? The only categories available via Amazon Fresh are grocery, household, and health and beauty.

Where are orders fulfilled? Amazon Fresh orders are fulfilled from local Amazon warehouses.

Is order pickup available? Amazon Fresh order pickup is only available in Seattle.

How can brands make their products eligible? Inclusion in the Amazon Fresh program is by invitation only and reserved for the best-selling products in specific regions.

Amazon Prime Now 101

Amazon’s newest grocery delivery service, Amazon Prime Now, started in December 2014 with a small test in New York City. Amazon expanded the service to other U.S. cities about 18 months later, and it is now available in more than 90 cities.

How do you access it? Amazon Prime Now is accessible through a separate Amazon Prime Now website and mobile app. As of recently, you can also use the main Amazon site, but you can only shop for products that are available from Whole Foods (not Amazon warehouses or other local grocery stores).

Is there a delivery fee? Delivery is free on orders of $35 or more.

How quickly are orders delivered? Customers can schedule deliveries within two hours or pay an additional fee to get orders in as little as one hour.

What product categories are available? Based on the popularity of products in your particular area, categories range from grocery, household, and health and beauty to electronics, books, clothing and accessories, toys and games, and more.

Where are orders fulfilled? Amazon Prime Now orders are fulfilled from local Amazon warehouses, Whole Foods Market locations, and other local grocery stores, depending on your location.

Is order pickup available? Amazon Prime Now order pickup is available at select Whole Foods Market locations.

How can brands make their products eligible? The easiest way to ensure your products are available via Amazon Prime Now is to be a Whole Foods Market vendor. As with Amazon Fresh, the company also invites the best-selling products in specific regions to participate in Prime Now.

Differences from Amazon.com

Customer behavior differs between Amazon.com, Fresh and Prime Now, and brands must tailor their strategies to each service in order to succeed. For example, customers shopping on Amazon.com are more likely to be stocking up their pantries for the few weeks ahead, purchasing larger quantities of nonperishable items like toilet paper, fruit snacks and bottled water. Customers shopping on Amazon Fresh and Prime Now, on the other hand, are more likely to be fulfilling a short-term, immediate need, such as a single gallon of milk for dinner tonight or a gift for a birthday party tomorrow afternoon. These customers are also more likely to add a single-count beverage or candy bar to their order to satiate an impulse craving. Brands can take advantage of these differences by offering unique pack sizes, configurations and deals for each specific service.

Additionally, it’s important to control any variables between the three services that could impact customer experience. The first variable is product pricing, which can differ between Amazon.com, Fresh and Prime Now – and even between the different stores on Prime Now. It also varies based on ZIP code. For example, an 80-count box of Seventh Generation Free & Clear Fabric Softener Sheets costs $4.99 on Amazon, $4.99 on Amazon Fresh, $5.99 on Amazon Prime Now from Prime Now LLC, and $6.69 on Amazon Prime Now from Whole Foods (for ZIP code 60602). To overcome potential customer service issues, it’s important to effectively communicate the reasoning behind these pricing discrepancies and to work with Amazon on wholesale pricing and promotions that alleviate large spreads in price.

Another variable is product inventory, which also differs between the three services. Inventory management is more complex on Fresh and Prime Now because Amazon can’t cross-ship items. Customers can only shop current available inventory from the stores and Amazon warehouses that are closest to them. Because of this, products only show up when they are in stock in a particular area, which means customers are forced to find an alternative when their first-choice item is unavailable. Brands should work with Amazon to ensure it has an ample supply of their products available via Fresh and/or Prime Now in the geographic locations where demand is highest.

Future Predictions

In my opinion, consumer confusion regarding the different Amazon grocery delivery services creates some friction in the shopping experience. This friction will limit the overall success of these services compared to those offered by competitors like Walmart and Target. In fact, a recent Rakuten Intelligence study showed that Amazon only held a combined 13.8% of the online grocery delivery market. Amazon knows how valuable these same-day and on-demand shoppers are to retailers, so they will need to aggressively pursue additional market share.

I believe the first step Amazon will undertake to increase its market share will be combining Amazon Fresh and Prime Now into a singular program. Next, Amazon will start to open more grocery stores outside of the Whole Foods Market brand. It will need to cohesively align this new grocery store concept and its two grocery delivery services into a singular branded extension in order to create a truly frictionless shopping experience for customers. (Note: I don’t believe the Amazon Fresh or Prime Now brand is appropriate for this extension.)

OneSpace Can Help

Still confused about the differences between Amazon.com, Fresh and Prime Now and what you need to do to succeed on each? OneSpace is here to help. Our suite of tools and on-demand services helps brands centralize, optimize and publish product content that wins top position on multiple online retailers at scale. Contact us to learn more.