Amazon to test Prime Now service in Canada

Date : 04 September 2017

Amazon is preparing to test its Amazon Prime Now delivery service in Canada later this year, according to reports in the Wall Street Journal.

Service set to be tested in Vancouver and Toronto

Amazon’s Prime Now service is built around the proposition of offering delivery within two hours. According to reports, the retailer is planning to launch the service in Vancouver in January, and in Toronto early next year. The service is expected to offer thousands of items for delivery, including grocery and personal care products. The retailer is partnering with many locally based businesses, including bakeries, butchers and other grocery retailers to offer the service.

Amazon could change customer expectations around fast delivery

The launch of this service will significantly expand Amazon's presence in the market. Although it has been investing in expanding its operations, it has yet to move into the grocery space. Its general merchandise offer also lags that which is available in the US. It will be the only major retailer to offer two-hour delivery in the market.

Whole Foods Market acquisition provides opportunity to launch Amazon Fresh

The ecommerce channel remains relatively immature in Canada, particularly grocery ecommerce. The country's low level of population density and large landmass, create challenging conditions with regards to last mile delivery. However, Amazon's initial focus on two of Canada's largest cities, and its recent acquisition of Whole Foods Market, could provide it with a significant foothold in the country. With 13 stores across the country, the majority of which are in Vancouver and Toronto, it also has the infrastructure to start developing its Amazon Fresh service.

Canadian retailers aiming to get out in front of Amazon's initiatives

Reports of the planned Amazon Prime Now service and the opportunity to launch Amazon Fresh, will not go unnoticed by the retailer's major competitors. Many are expected to pull forward their planned ecommerce initiatives over the next few months. Last month, Walmart Canada launched its online marketplace, doubling the range of products it offers. By the end of the year, this is expected to double again as it deepens its presence in key categories. In term of grocery ecommerce, expect to see the major retailers move to a more rapid roll-out pace as they aim to get in front of Amazon's initiatives.

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Stewart Samuel, Program Director, IGD Canada: based in Canada, Stewart heads up all of IGD's research and coverage on the US ecommerce channel. He is also responsible for shaping IGD's research program across North America. Contact Stewart at [email protected] for further insight on the region's markets, channels and retailers. Follow Stewart on Twitter: @Stewart_IGD