In February 2018, Amazon.com Inc. (Amazon) was tackling what seemed to be the most challenging problem in grocery retailing—how to efficiently and effectively deliver groceries to customers—known generally as the last-mile challenge. Seattle-based Amazon, which had 22 years of experience delivering goods such as books, apparel, and electronics sold on its website, had already proven that it could efficiently deliver general merchandise to customers. Yet, groceries presented a unique challenge because they were perishable and customers paid more attention to getting them in a timely fashion. After all, it was food that was being carried to the consumer’s home. Amazon’s efforts to solve the last mile challenge for grocery delivery had not thus far been successful. In November 2017, it shut down its AmazonFresh delivery service in five states but claimed this was unrelated to its purchase of Whole Foods Market Inc. Could Amazon successfully overcome the challenge of last-mile grocery delivery? If so, what were the implications for Amazon and other retailers?
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