Is AmazonFresh a Trojan horse for same day deliveries of all products?

Amazon will begin delivering groceries to New Yorkers from a 560,000-square-foot location in New Jersey, reports Business Insider. The report notes that Amazon has begun advertising for staff and suggests the company will begin service in New York in 2014.

Meanwhile, a cover story in the most recent issure of Fast Company argues that AmazonFresh is part of a three-phase strategy at Amazon to dominate the retail sector.

The first phase is expanding Prime, a $79 annual membership that offers free delivery for many products as well as access to video and other services. The story quotes Robbie Schwietzer, VP of Prime, saying that, once you have Prime, your human nature takes over. …Not only do you buy more, but you buy in a broader set of categories. You discover all the selections we have that you otherwise wouldnt have thought to look to Amazon for.

The second phase is the creation of a network of distribution centers across the country. If we can be smart enoughand when I say ‘smart enough,’ I mean have the right technology, the right software systems, machine-learning toolsto position inventory in all the right places, over time your items never get on an airplane, Amazon CEO Jeff Bezos told Fast Company.

The last phase is one-day delivery. Thats where AmazonFresh comes in. The service, which delivers groceries to the home, has been tested in Seattle and may soon roll out in as many as 20 cities across the country. “We’d been doing a very efficient job with our current distribution model for a wide variety of things,” Bezos told Fast Company. “Diapers? Fine, no problem. Even Cheerios. But there are a bunch of products that you can’t just wrap up in a cardboard box and ship ’em. It doesn’t work for milk. It doesn’t work for hamburger.”

Fast Company quotes Tom Furphy, a former Amazon executive who once ran the service, who argues that AmazonFresh was established with the goal of providing one-day service for a broad range of products. “Think of the synergy between Prime, same-day delivery and Fresh,” Furphy told Fast Company. “When all of those things start working in concert, it can be a very beautiful thing.”

The three pillars of Prime, local distribution centers and AmazonFresh could push tens of thousands more retailers to use Amazon to handle their transactions and delivery, Fast Company argues: By supplementing its long-term relationships with UPS and FedEx with its own Fresh trucks, Amazon may well be able to deliver faster than retailers that depend entirely on outside services. “Pretty soon, if you’re a retailer with your online business, you’re going to be faced with a choice,” says Brian Walker, a former analyst at Forrester Research who is now with Hybris, a provider of e-commerce software. “You’re not going to be able to match Amazon, so you’re going to have to consider partnering with them and leveraging their network.”