Grocery is a sector in which Amazon has traditionally struggled. With the UK’s leading grocers having established strong offerings themselves and the rise and rise of Ocado, the nation’s weekly shop seemed to elude Bezos’ behemoth.
But, is that about to change with the arrival of Amazon Fresh? It’s long been speculated that the ideal grocery store of the future was a combination of robust online / click and collect for ambient products with a more alluring experiential component for fruit, veg, baked goods and other fresh foods. We’ve already seen some experimentation with cashier-less shops coupled with pick-up lockers, and automated picking (“vending machine” style) in Germany and Sweden. Amazon’s moves may be more seismic given their dominance in delivering to consumers.
Add to that Amazon’s understanding of what customers most dislike about the shopping experience – checkout – and removing it altogether and something interesting is happening.
Traditional grocers have struggled to balance the supermarket experience with the optimal picking environment for online. This adds inefficiency to an already diluted area of their model. This would explain Ocado’s place as the UK’s recently crowned most valuable retailer.
So, what does this mean for the competition? Amazon has, once again, placed the customer at the centre of their thinking. What don’t they like about shopping? What do they want see, smell, feel when purchasing food? And, what will they happily have delivered / packaged up in advance? A true omnichannel offering is in the making.
With many looking to accelerate their transformation in line with new consumer behaviours, the winners will be those who look to their customers and truly respond to their habits and preferences. Amazon has an outstanding track record in removing the friction from the consumer experience. Adding an experiential component to their grocery offering poses a serious challenge not just to the UK’s grocers, but also the way we buy our groceries.