GroceriesIn the razor-thin profit area of groceries, Amazon.com is slowly expanding its fresh-grocery business to the entire Seattle metropolitan area in the next three months, according to a Bloomberg.com story.

Why Amazon, the biggest online retailer on the planet, would want to become the next Webvan is beyond me.

Amazon already sells groceries online across the country, but it's a big step from selling diapers, cereal, popcorn and other items with a long shelf life to peaches, milk, lettuce and other perishables.

That might have been part of what killed Webvan, which Amazon owns. Webvan went bankrupt in 2001 but had a good ride for a while. I still have a few of its plastic containers from grocery deliveries.

I was a big fan of Webvan, and I still like anything that keeps me from having to leave the house to go shopping. My wife, however, wasn't so keen, saying she wanted to touch and smell the peaches, and other fruit and such, for freshness.

Beyond the tiny profit margins for grocery stores, I think the need to touch produce is what killed Webvan's delivery model. I didn't save much money with Webvan, but it did save me time, and so it was worth it. Having an Amazon worker grab a few fresh peaches doesn't seem like it would be that big of a deal, but some shoppers do like to "experience" their grocery shopping.

Amazon is keeping costs low by limiting advertising and not expanding into multiple cities at once, a mistake that Webvan made by quickly going into 10 U.S. cities.

Amazon Fresh started as a test project in 2007 and is limited to 49 Seattle ZIP codes. It plans to grow slowly.

No matter how slow it grows, it may not be slow enough to keep it from failing. I may be out of the norm as someone who likes grocery delivery, but I'll bet many more people will prefer to pick their own produce.

Aaron Crowe is a freelance journalist in the San Francisco Bay Area. Reach him at www.AaronCrowe.net





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