Tuesday, July 30, 2013

Amazon Fresh and the Rise of the Consumer City

I'm starting to think that Amazon's Pat Bajari (their Chief Economist and my old co-author) spends his days thinking of new ways to lure my household to spend 100% of our disposable income at Amazon.  The lucky people of Seattle and Los Angeles (who live in certain "select zip codes") now have access to Amazon Fresh.   Since we are an Amazon Prime household who lives in Los Angeles, we have been able to purchase some great food products that are delivered to our door in a funky green bag.

"Free same-day and early morning delivery on orders over $35 of more than 500,000 Amazon items, including fresh grocery and local products.

AmazonFresh is now available in the Los Angeles area in select zip codes as a free 90-day trial to Amazon Prime members. After your free 90-day trial, your membership will automatically upgrade from a Prime membership to a Prime Fresh membership and you will be charged $299 for the next year and annually after that. This includes all the benefits of Prime, plus access to AmazonFresh. Your current Prime membership will be refunded on a pro-rated basis when you upgrade to Prime Fresh." 
When Glaeser, Kolko and Saiz wrote their "consumer city" paper, did they anticipate this new product?  Note that an Internet Company (Amazon) is making living in a great city (Los Angeles) even better as its new Amazon Fresh saves us time shopping and now we have a greater access to an increased variety of products such as wild boar.  Whole Foods in Westwood hasn't offered us that!    This case of the Internet making cities even stronger is an old point that Glaeser and Gaspar made years ago.