Amazon Just Raised the Bar on Grocery Delivery. Here’s How Grocers Can Compete.

Introduction

Amazon just raised the bar—again. The retail giant has announced it will offer same-day delivery of fresh groceries in over 1,000 U.S. cities and towns, with plans to double that number by the end of 2025. The offering spans perishable categories like dairy, produce, frozen foods, meat, seafood, and baked goods—categories where freshness, speed, and precision are non-negotiable.

This marks a new phase in Amazon’s retail dominance—one that should push grocers to ask a critical question:

“Are we equipped to compete on speed, accuracy, and efficiency—without sacrificing the fundamentals of fresh food retail?”

Because whether you're a regional grocer, a national chain, or an operator in a high-frequency market, the fulfillment arms race is accelerating.

And this isn’t just about who has the biggest warehouse network or the most drivers—it’s about who can execute at the store level, in real time, with precision. Competing effectively takes more than a delivery app or added labor. It requires an operational rethink grounded in accurate inventory, efficient picking, and tightly coordinated fulfillment workflows.

Let’s break down what this means—and how grocery retailers can respond.

The Real Risk: Falling Behind on Fulfillment

Many grocers still operate with disconnected systems—inventory managed one way, picking managed another, and delivery tacked on at the end. That fragmentation leads to:

• Out-of-stocks showing as available online
• Wasted picker time due to poor inventory visibility
• Orders delayed or canceled due to bad handoffs
• High labor costs and low throughput per picker
• Higher post-sales support volume—which drives up service costs

As demand increases, these issues don’t just create friction—they create churn. Today’s customers don’t wait. If the experience breaks, they bounce—often to competitors.

The Fulfillment Experience Is the Product

Amazon knows this better than anyone. The “what” of the order matters less than the “how”—how fast it arrives, how accurate it is, how easy the experience feels. That’s the new competitive differentiator.

Retailers that want to stay in the game need to focus on:

• Faster picks per store or fulfillment site
• More efficient, flexible routing for delivery
• Real-time inventory accuracy
• Fewer cancellations and stockouts

All of that requires the right infrastructure—and not just in warehouses. Store-level systems must evolve too.

It's Not Just About Speed — It's About Shelf-Level Control

Amazon isn’t winning on speed alone. It’s winning because its systems are deeply connected—from inventory, to picking, to delivery—enabling fast, accurate, cost-effective execution at scale.

For grocers, delivery speed doesn’t matter if shelves are out of sync or pickers are flying blind. Real-time shelf visibility, accurate replenishment across fresh and packaged SKUs, and picking workflows that link directly to dispatch—all of it matters. Especially when every store, dark store, or MFC needs to operate with the same precision.

This is about gaining control at the shelf level—because that's where the customer experience is won or lost. Combining inventory tracking with in-store picking workflows eliminates blind spots, reduces substitutions, and supports better labor efficiency from shelf to doorstep.

Grocers that get this right don't just match the promise—they deliver on it, every time.

What It Takes to Compete

Best-in-class grocers are rethinking their grocery replenishment strategies and investing to respond—not just to Amazon, but to the future of food fulfillment.

1. In-Store Inventory Management with Real-Time Accuracy

You can’t promise fast delivery if you can’t promise stock availability. Grocers need item-level accuracy across all store locations to reduce substitutions, eliminate spoilage, and create confidence in the digital shelf.

2. Integrated In-Store Picking Workflows

Many grocers still treat picking as an afterthought. But for fast fulfillment, it needs to be deeply connected to inventory systems and store operations.

Some platforms, such as OrderGrid, offer features like Express Multi-Pick, which allow staff to fulfill multiple orders in a single pass—improving units per hour (UPH), reducing congestion in aisles, and accelerating dispatch without compromising accuracy.

3. Real-Time Fulfillment Coordination

Speed doesn’t happen in isolation. It requires tight orchestration across picking, packing, and driver dispatch—with real-time updates and alerts for all stakeholders. Systems should flex to support spikes in volume without breaking down.

4. Shelf-Level Replenishment That Keeps Up

High-volume stores can’t rely on static or manual restocking. Grocers need automated inventory replenishment tools that dynamically adjust based on real-world demand patterns, freshness requirements, and upcoming promotions to support shelf accuracy and replenishment optimization.

5. Predictive Demand Planning

Rapid delivery only works when the right items are on hand at the right time. AI-demand forecasting helps ensure that high-demand SKUs stay in stock, while low-movers don’t take up valuable shelf or warehouse space. 

For perishables, where spoilage directly impacts margin, this level of precision is critical. Solutions like OrderGrid’s AI demand planning software are designed to support freshness, reduce waste, and drive smarter inventory optimization—especially in fast-moving grocery environments.

6. Operational Simplicity for Store Teams

Amazon has teams dedicated to picking. Your employees juggle stocking, checkout, customer service, and fulfillment. Your tools must be intuitive, mobile-optimized, and quick to train on—especially in high-turnover environments.

7. Multi-Channel Fulfillment from One System

Grocery stores don’t just fulfill online orders—they power loyalty programs, bulk orders, B2B delivery, and third-party marketplace sales. Your systems must flex to fulfill across channels without duplicating workflows or adding tech debt. 

Why Now? The Volume Curve Is Only Going Up

The numbers don’t lie:

The global grocery delivery market is projected to reach $2 trillion by 2032, growing at a 20% CAGR. Meanwhile, the U.S. online grocery segment alone is expected to expand from $175.6 billion in 2024 to nearly $690 billion by 2033, reflecting a 15.6% CAGR.

As Amazon scales its same-day delivery infrastructure across thousands of U.S. cities, the pressure on regional and national grocers is intensifying. But this moment isn’t just a challenge—it’s a massive opportunity for those ready to adapt.

Local Advantage, Scaled Smarter

What Amazon offers in scale, regional grocers can match with local expertise, curated assortments, and proximity. The key is to match that local strength with fulfillment tech that's just as modern and efficient.

Consider what local grocers already do well: they know their customers' preferences, they can source from regional suppliers, they understand seasonal demand patterns, and they're embedded in their communities. The challenge isn't competing on these strengths—it's ensuring their operational backbone can deliver on them at Amazon-like speed and accuracy.

With the right infrastructure, you don’t have to rip and replace. You just need systems that flex with you, empower your teams, and scale the excellence you’ve already built.

Modern fulfillment isn’t one-size-fits-all. It’s what turns local strength into a long-term advantage.

Final Thoughts

Amazon’s expansion is a wake-up call—but it’s also a call to action.

With the right infrastructure, grocers can compete on speed, control inventory with precision, and deliver a better customer experience—without becoming a tech company themselves.

OrderGrid makes that possible by offering a complete inventory management platform that combines real-time inventory management software, AI-demand forecasting, smart replenishment, integrated in-store picking, and orchestrated fulfillment workflows—purpose-built for the speed and complexity of modern grocery.

And we handle the heavy lifting, seamlessly integrating with your existing POS, ERP, and order sources—no rip-and-replace required. Our open APIs and flexible architecture connect with the tools you already use, so you can modernize without disruption.

If you're ready to streamline operations, boost efficiency, and scale confidently in the face of rising demand, we’re here to help.

Let’s talk about how to future-proof your fulfillment stack.