Amazon expands Prime Now, offers U.S. alcohol for first time

SAN FRANCISCO (Reuters) – Amazon.com said on Tuesday it will begin delivering wine, beer and spirits to U.S. customers for the first time as part of its speedy delivery service, Prime Now.

The online retailer is expanding Prime Now, its one- and two-hour service, to Seattle, where the company is headquartered, and offering alcohol deliveries there.

Amazon Prime, the company’s $99 per year shopping membership program, offers free two-day delivery on millions of items. It is a key testing ground for the retailer’s new services, ranging from TV and on-demand video to fast delivery.

Amazon has said it has “tens of millions” of Prime subscribers. Analysts estimate the program to have around 40 million users worldwide.

The company has steadily expanded Prime Now since it launched the service in New York City last year. It facilitates integration of the retailer’s grocery delivery service, Amazon Fresh, which has been slower to expand to new markets.

On-demand grocery delivery is a growing and competitive market in the United States. Instacart, a grocery delivery company, announced on Tuesday that it had expanded to Indianapolis, its 17th city. Other startups, like Postmates, which focuses on meal delivery, also deliver personal care goods and alcohol for customers using a network of couriers.

Prime Now customers can order using an app available on both iOS and Android devices. Orders are shipped from smaller warehouses, or hubs. An Amazon spokeswoman said the company opened two facilities in Seattle and Kirkland, Washington, to handle Prime Now deliveries.

(Reporting by Mari Saito; Editing by Dan Grebler)