by Tom Shackleton
Amazon has announced the launch of its “Amazon Fresh” grocery service in the UK this morning. The US eCommerce giant will initially offer the service only to Prime subscribers in central and east London for an additional £6.99 per month, above the pre-existing monthly fee. According to Amazon, there are plans to roll out the service methodically across the UK so whilst this is an exciting new move, it may be a while before everyone can take advantage of this.
This is a move that has been anticipated for a while now after Amazon’s continued expansion of Prime Now one hour delivery slots and the fact that Amazon Fresh has also been running in the US since 2007.
Similarly to Prime Now, Amazon will offer it’s one hour same day options with delivery by 11pm if you order before 1pm. Deliveries will be fulfilled by Amazon’s existing logistics network and vans wont be adorned with Amazon Fresh branding. Still only 4% of sales from food stores are made online, so it will be interesting to see how bringing such flexible delivery options to the market changes this. There could finally be a larger swing towards online grocery shopping with increased pressure for supermarkets to improve their offerings.
With the groceries themselves supplied by Morrisons, Amazon is able to offer a wide range of branded goods, as well as directly competing with the big 4 supermarkets’ white label products. This latest move puts Amazon in direct competition with online supermarket Ocado.
Possibly in anticipation, Sainsburys recently agreed a deal to buy Argos owner Home Retail Group, who themselves offer “Fast Track” one hour delivery. This is a move which has attracted attention from competition authorities and could result in the closure of many Argos stores. Despite this, many experts believe it could make Sainsburys’ delivery options and product ranges more attractive to customers.
Amazon continues to redefine consumer expectations when it comes to eCommerce and the delivery experience. We will be watching with interest to see how Amazon Fresh impacts both large grocery retailers and smaller independents, who are increasingly having to add value elsewhere, being unable to compete with Amazon on speed and logistics.
Services like Amazon Fresh and Prime Now are great for customer experience, but are unreasonable for smaller eCommerce retailers. Using services such as click and collect for retailers with physical stores and relying on the innovation of distribution companies like DPD to provide more pleasurable and flexible delivery experiences are still the only real options for independent eCommerce retailers looking to remain competitive.