Amazon has dreamed of cracking Walmart’s lock on groceries for decades with limited success. A massive same-day shopping expansion could change that

·AmazonAmazon has dreamed of cracking Walmart’s lock on groceries for decades with limited success

A massive same-day shopping expansion could change thatBy Jason Del ReyBy Jason Del Rey CorrespondentJason Del Rey CorrespondentJason Del Rey is a nology correspondent at Fortune and a co-chair of the Fortune Brainstorm and Fortune Brainstorm AI conferences.SEE FULL BIO Amazon is making its attempt at offering a dery model for perishable goods that is both attractive to customers and economically sustainable

At a large press event last fall, a top Amazon executive stood onstage in front of hundreds of journalists and took a swipe at the company’s largest retail rival.Referencing Amazon.com’s massive duct selection, and plans for the company to more closely integrate groceries into its main online shopping experience, Amazon VP Anand Varadarajan boasted that the giant was building a version of a “super center that’s actually super to shop at,”—a not-so-subtle dig at Walmart, inventor of the U.S. supercenter model and a force in the online grocery market as well. “The average consumer visits between four and five different retailers for groceries every single month,” the executive said in front of a smaller group of reporters later that day

What Amazon was doing, the executive claimed, was creating a one-stop shop that all customers crave

The obvious implication was that Walmart, the historical one-stop retail option, was not dering on the mise

On Wednesday, Amazon announced gress on what it believes is one important leg in that mission: the rollout to 1,000 U.S. cities of a same-day shopping capability where customers can buy fresh, perishable groceries, alongside regular non-grocery merchandise in a single order

Such an order wouldn’t carry a dery fee for Prime members as long as it totaled at least $25 in “most cities,” the company said

Grocery is the biggest retail category and still relatively untouched by the internet.” Indeed

In an interview for my book Winner Sells All, the Amazon/Walmart rivalry, Amazon’s current CEO of its core consumer Doug Herrington explained the appeal of the grocery category. “Selling a book or a TV is great and super helpful, [but] how many times do I buy a book or TV each week versus how many times do I buy a packaged goods item, or some toilet paper or some food?” In short, if Amazon can starting making a real dent in the grocery dery market, customers will ly shop even more frequently with the Internet giant

In fact, the company previously said that was the behavior it witnessed among customers in test last year. “This deepens AMZN’s customer engagement by strengthening a high-frequency purchase category into the Prime ecosystem, increasing stickiness and customer lifetime value,” Evercore’s Mark Mahaney wrote of the same-day grocery rollout in a re note to clients on Wednesday

He said the service could pose a threat to Instacart as well as Walmart’s same-day dery membership gram, Walmart+

A history of launches, pivots, and setbacks The path to the grocery aisle has been a long, and sometimes bumpy one, for Amazon, with this week’s announcement marking the in a string of grocery-related launches, failures, and pivots over the last two decades

For those who’ve closely ed the company’s efforts in this area, Wednesday’s announcement might even feel deja vu

The service has gone through countless model tweaks over the years as leadership has attempted to strike a balance between a price that’s attractive to enough customers while still supporting a cost structure that is economically sustainable

Amazon also runs a chain of dozens of Amazon Fresh grocery stores, which has a gone through phases of retrenchment and expansion itself

Along the way, Amazon has seemed intent in recent years on dispelling the notion that it has failed in the grocery space

At the press event in the fall, an Amazon executive said “what most people don’t realize is we already have a huge established grocery online…most of the selection today are things pantry items and household goods or what we call everyday essentials.” And on recent earnings calls, Amazon executives including CEO Andy Jassy have hammered the messaging that this “everyday essentials” is already a major player in the non-perishable grocery space

Now, with this initiative, Amazon is moving on to the type of fresh, perishable foods that customers really think of when they hear the word “grocery.” And it’s doing it in a way, thanks to year’s of cost-cutting under Jassy, that it believes is finally sustainable

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