Amazon Fresh drops grocery delivery fee to $15 a month

Grocery delivery is the holy grail of online shopping.

According to The Wall Street Journal, the e-commerce giant plans to open convenience stores that sell milk, produce and other consumables, as well as drive-up destinations where shoppers can have their orders brought to the auto.

Amazon Fresh costs $15 per month-in addition to the flat $99 per year Amazon charges for Prime-and is only available in California, New Jersey, New York City, Philadelphia, Boston, Washington, among others.

Why would Amazon want to get into the grocery business? Amazon aims to compete more directly with grocery discounters, as well as Wal-Mart Stores Inc., which has recently been expanding its own pickup sites.

Amazon's eventual foray into physical grocery stores has been rumored for a while, so while the details are new, they're not entirely unexpected.

The $397b internet retailer Amazon is undertaking a brick and mortar venture that will feature a chain of stores and drive-through locations where customers can pick up groceries ordered online, according to a report today in the Guardian.

The stores - known internally as Project Como - will be small, stocked only with fresh items such as produce, milk, and meats, The Journal reports, citing unnamed sources. The company is also reportedly introducing drive-in locations where groceries would be delivered to the vehicle.

Amazon declined to comment for this story.

Plans include ordering and purchasing items via phones or other touchscreen devices, as well as curbside pick-up, another service that continues to sweep the buy-side as consumers become more and more convenience-driven.

"The question is, is there some material advantage that they have that would make people to feel it's desirable to order things from them rather than other places such as their local grocery store?" said Prevor.