Amazon is reported to have extended its business reach into fresh grocery provision and is operating a trial of the ‘Amazon Fresh Pickup’ service from two ‘bricks-and-mortar’ locations in its home city of Seattle.
Order Online and Pickup From Fresh Food Warehouse
The Amazon Fresh Pickup pilot service is now being offered to Amazon Prime members who can shop online for fresh groceries and then drive to pick them up (as quickly as 15 minutes after the order has been placed) from warehouses in the Ballard and Sodo neighbourhoods of Seattle in the US.
The obvious difference to the Amazon Fresh service, which already operates in 16 cities (14 US metropolitan centres, Tokyo, and London) is that customers are invited to come and pick their shopping up themselves, rather than having it delivered to their door.
As the name suggests, the produce offered in this pilot service includes meats, fresh produce, bread, dairy, and other household essentials.
Initial reports indicate that users of the service in Seattle need to select delivery or pickup before browsing on the website, and that customer choice of produce is limited by the region and by which distribution agreements Amazon has in that region at the time i.e. prices and available items vary between their pickup and delivery services.
Some of the advantages of the Amazon Fresh Pickup service (apart from the convenience of online ordering, which is not unique to Amazon) are that there is no minimum order, there are no extra shipping, handling, or any store-related fees (other than the cost of your own petrol and a proportion of Prime membership), and Amazon staff will also load the order directly into your car if you choose not to pick it up yourself from the ‘waiting room’.
There is also the fact that rather than having to wait in for the shopping delivery to arrive, you can control when you go and pick it up, and you may decide to combine it with other business that you have along the same route.
Some customers, most likely those who order online anyway and / or don’t want / aren’t able to walk around e.g. a large supermarket and wait in long checkout queues, are likely to see the benefits of the service.
Fingers In A Lot Of Pies
This move into fresh groceries is not unexpected from a company that has extended its brand and its reach into many different markets. For example, there is now a physical Amazon-branded bookstore in New York City (Manhattan), the new digital subscription service ‘Subscribe With Amazon’ opened last month, as did the ‘Amazon Business’ online ‘trade counter’ service in the UK.
Some analysts have also mentioned a possible move into clothing plus there are reports that Amazon may be close to launching an own-brand fashion label. These reports have been fuelled by news of Amazon creating a fashion photography studio in London.
Amazon is also reportedly creating 5,000 new full-time jobs at its new head office in London, its Edinburgh customer service centre, and at three more new warehouses / fulfilment centres in Tilbury, Doncaster and Daventry.
What Does This Mean For Your Business?
Amazon’s global scale (and its economies thereof), the success of its business model and its ability to run pilots in major locations, plus the ability, strength and reach of its delivery network and its distribution and packing expertise, coupled with the power of its brand and the ease of online shopping for customers now make it a serious competitor for many companies in many different markets. Amazon is also at the forefront of innovation for distribution e.g. drone and autonomous robot deliveries, which could also be a source of competitive advantage in the future.
Where fresh groceries are concerned, UK supermarket brands’ experience and expertise, and delivery services will still give Amazon some serious competition, plus, many UK consumers enjoy the physical experience of shopping, and online ordering gives retailers (which could now include Amazon) less control over the shopping environment, and less ability to cause customers to make the unplanned purchases that are vital to bricks-and-mortar grocery retailers’ profits.
Author: Ben Armytage