Amazon Testing a 2 hour "Deliver With Prime" program?

This one flew under my radar, but a GroceryDive article tipped me to it. Amazon is starting to act as a delivery provider for grocery stores like SaveMart.

And it only works for Prime members.

The delivery fee starts at $4.99 which is less than even the $10 Whole Foods delivery fee. SaveMart is even kicking in 15% off the order to incent the behavior, too.

Of course it's just a test. So let me get this straight:

- Amazon is a grocer, whose Fresh is still expanding across the US.

- SaveMart does not promote its own loyalty program. They are making Prime stronger.

- Instacart has a lot to lose here, as they appear to be the primary SaveMart delivery provider today.

- Amazon likely getting more transactional data from grocers with this.

- and the grocer is kicking in 15% as an incentive?

Not only is this letting the fox in the henhouse, it's leaving money for it when it gets there to take the hen!

I tried to check out the experience myself online at the Savemart Lathrop store but couldn't find it there. It's possible it's not live yet.

These kinds of things are huge risks to Instacart. Amazon can afford to give money away (look at Lord of the Rings and its impact on Prime - how much money did they give away there??) just to boost Prime. Instacart cannot.

Meanwhile, many grocers need digital and delivery services and could be forced into Amazon's waiting arms without good alternatives, because Amazon has more volume and can potentially provide the lowest cost per transaction.