Amazon, Rite Aid team up to offer 2-hour delivery

Amazon is seeking to continue to grow its delivery network through a partnership with another retailer.

The news: Amazon is partnering with Rite Aid to test out two-hour delivery in a pair of markets. The service will provide delivery of personal care items in Newark, New Jersey, and Burbank, California. Shopping is completed through Amazon, and a landing page is now live.

How it works:

• Prime members will have access to the service in the two launch markets.
• Items offered will include grocery, personal care and cosmetics. The California location will deliver alcohol.
• Prescriptions and pharmaceuticals will not be available.
• Fees are as follows: $2.95 for orders $75-$100, $4.95 for deliveries $40-$75, and $6.95 for deliveries under $40.

Key quote from Amazon: “Rite Aid’s availability on Amazon provides our local Prime members in Newark, New Jersey, and Burbank, California, with even more selection and convenience as they continue to shop for health and personal care, cosmetics and grocery essentials online and trust they will be delivered to their door fast. We’re consistently looking for ways to offer more choice, flexibility and value for Prime members, so we look forward to expanding our two-hour delivery window offering to more Rite Aid locations in the future.”

Store to door: As it continues to grow its logistics network, Amazon is increasingly working with other retailers to provide delivery services. For the ecommerce giant, this represents a business line that allows the delivery network it built for its own use to be accessed by others. It also helps to grow Amazon’s assortment, which has long been a key part of the company’s flywheel that brings advantages on price and customer loyalty. It builds on an announcement from last year, when Amazon debuted a new service that provided delivery from mall-based retailers.

Drug store + delivery: The partnership signals Amazon’s entrance into an area of retail that has not been as quick to adopt the fast delivery model. Drug stores prize their local proximity to populations, making omnichannel offerings in-store pickup a highlight of digital offerings. While they have offered ecommerce, drug stores have not built out logistics networks. This means they work with other providers. In this case, Amazon is entering the fold, signaling it sees an opening in the market. While no pharmacy delivery is available now, it wouldn't be a stretch to see the company explore this area, given its interest in expanding into healthcare via the recent acquisition of primary care service One Medical.

Convenience + time: The ever-increasing capabilities of Amazon to deliver quickly and the emergence of instant delivery services like Gopuff are raising customer expectations that items can be at their door soon after they are ordered. This is creating more demand for the everyday and convenience items available at drug stores. Some delivery providers, like Uber, are partnering with convenience stores to provide fast delivery. Amazon and Rite Aid are showing a path through the drug store. As noted above, Rite Aid’s many locations at the neighborhood-level could serve as an advantage. While the service is available in two markets now, Rite Aid has plans to expand it to more of its 2,244 locations around the country.

“Our customer-centric approach complements the busy lives of our consumers to conveniently meet them where they are, which is why we are excited to team up with Amazon to provide local Prime members convenient access to deliver everyday essentials right to their doorstep with two-hour delivery windows,” Rite Aid said in a statement.