Amazon Launches Prime Pantry for Delivery of Everyday Items

Source: Keith Anderson, Justin Bomberowitz, Wednesday, Apr 23, 2014

Amazon’s long anticipated delivery service for everyday items in standard pack sizes has quietly gone live: Prime Pantry is now available exclusively to Prime members. For a $5.99 dollar delivery fee (incremental to the cost of a Prime membership), Amazon shoppers can order up to 45 pounds \ of household goods in a single order, from beverages to baby care to pet care. Prime Pantry is designed to incentivize shoppers to build a basket (or in this case a box) that shoppers can fill with their everyday essentials in standard sizes.


At launch, the program appears to have an assortment of just under 2,500 SKUs. Other notable attributes:

  • First party sales only -- the Pantry assortment is heavily curated and doesn't list any 3P merchants
  • No Subscribe & Save linkage -- despite a high affinity between the products included in Pantry and Amazon's very successful auto-replenishment program, Subscribe & Save is not offered for Prime Pantry items
  • Shipping on most items averages 4 business days (versus standard 2-day shipping for most Prime items)

The initial categories Prime Pantry is targeting include Food & Snacks, Cooking, Beverages, Household items, Personal Care, Health & Nutrition, Baby Care and Pet Care.

Though the concept may initially be a bit counter-intuitive to shoppers, Amazon has made user interface enhancements to clarify how the program works. Before adding items to a Pantry box, shoppers can see what percentage of the box's weight limit each item will account fo. Shoppers can also easily filter products by weight, and a virtual box displays how much of their box's capacity has been filled.

Shoppers can additionally filter items by pack size, speciality attributes (e.g. organic), brand, or average customer review. Prime Pantry has launched with just under 2,500 SKUs to start but RNG expects that number to increase if the program proves successful and Amazon embeds fulfillment capability in more of its US fulfillment centers. (Currently, RNG believes Pantry items are warehoused in just 4 Amazon FCs).

Like other Amazon programs, promotion and customer acquisition is likely to be "organic"--driven by word-of-mouth and some email marketing. The program's landing page is linked to from the Beauty, Health & Grocery menu in Amazon's navigation bar, but RNG hasn't seen any prominent promotion on the homepage or category pages. Prime Pantry items are presented in-line with search results, which is likely to be how most Prime members discover the program.

Pricing for Pantry appears as if it may be static or manually set--a big departure from Amazon's dynamic pricing approach. Prices per SKU or per unit are often $x.99, $x.75, etc. Without the internal competitive dynamic introduced by Amazon's 3P marketplace, pricing for Pantry items may be more stable than on the broader Amazon site.

Given the highly curated assortment, Prime Pantry has the effect of making big brands look big. In several sub-categories, individual brands hold 75%+ shares of the digital shelf--and these brands tend to be leading national brands. 

Now that the program has launched, RNG finds that many of its previous assumptions and questions remain.

  • Pantry is a clear reflection of Amazon's long-term commitment to grocery and CPG along with AmazonFresh and the recently-launched AmazonDash single-purpose scan-or-speak-to-list device (which RNG expects will eventually be integrated with Pantry.)
  • Pantry seems primarily intended to improve Amazon's economics for SKUS with challenging weight-to-price ratios, and secondarily a new model for supporting leading national brands in a more carefully managed way.
  • Integration of Pantry items in-line with search results should drive awareness of the program, but major questions remain about demand. In many of the categories Pantry covers, close-enough Prime-eligible items are available for free 2-day shipping (often from 3rd parties); will shoppers really be swayed to pay $5.99 for 4-day shipping?

Stay tuned for more insights and analysis on Pantry.