Amazon Expands Online Grocery Shopping in the UK
It’s one to disrupt an old-fashioned business such as the bookselling industry but it’s quite another to compete with Tesco in the field of grocery. The move could hurt supermarkets’ margins, which are already thin.
But will it work? The ecommerce giant is catching up in the UK’s highly competitive food industry however, its share of online shopping has barely surpassed the 3% mark according to Mintel.
Cost
Amazon is a retailer with a market-share that is just a 10th of Tesco’s share, has launched a new salvo into the battle for extra-large hair comb (vimeo.com) Britain’s wallets. It plans to expand the online Fresh service to include all major towns and cities in the UK, starting with London and a few Home Counties. This puts it in a small concurrence with Deliveroo which already offers same-hour delivery of groceries in London. Amazon will also compete with its own third-party marketplace partner, like Waitrose and Morrisons.
It’s unlikely that this latest move will have much impact on supermarket sales overall however it could frighten some of the big players. The union representing retail workers Usdaw is already concerned about the possibility that the new venture could result in job losses.
The service will provide free same-day deliveries to Prime members in London and select Home Counties. Customers will be able to choose between 10,000 chilled and frozen items, provided by brand Hygienic Hand Dispenser Rubbermaid and independent suppliers. This includes artisans like Gail’s Artisan Bakery and C Lidgate and Booths, Whole Foods Market, Danone, Britvic, and Arla.
Although the launch of this new service is bound to generate headlines, its impact on UK grocery sales will be negligible. Mintel’s most recent online grocery report shows that more than half of shoppers online in the UK buy their groceries directly from supermarket websites. The largest are Ocado and Tesco. The big four are unlikely to be tempted to enter into a price war with a company as powerful as Amazon and will continue to rely on their extensive store estates including click-and-collect and delivery options across the country.
Amazon might decide that partnering with existing supermarket chains is the most effective way to enter into the eGrocery market. It already has a variety of these partnerships in place, including an agreement with the premium retailer Waitrose that permits the company to sell its products on the Amazon site and deliver the products to customers. It also has a deal with a discount store Iceland that allows its own website to sell its products through Amazon and which is delivered from local stores.
Selection
If you’re looking for a great variety of items from the comfort of your home Amazon’s online grocery shopping service might be just what you’re looking for. It provides a variety of household items, including drinks, food cosmetics, health and Vimeo.Com beauty items, and pet food. In addition, it offers a variety of organic and natural food options. You can even choose to have them delivered to your doorstep.
It’s a great alternative for traditional supermarkets, and you can save time. All you require is a tablet or smartphone and an internet connection. You can select the items you require and the delivery service delivers them to your house within a matter of hours. You can save money by using coupons and special discounts.
However, despite its small footprint Amazon’s latest move could pose a serious challenge for Tesco and other U.K. grocery stores, which are already fighting an increase in the cost of living. The company wants to attract customers who are cash-strapped across the country. The company’s strategy appears to be based on the idea that it can become a dominant player by offering a wide variety of goods and rapid delivery.
The company has also expanded its Prime Pantry to allow users to order a variety of household items, including laundry detergent, kitchen appliances and more. The selection includes brands like Kellogg’s, Ariel, and Colgate however it doesn’t include frozen or fresh food items. According to a Kantar Retail report, the expansion of the Pantry was a direct response to the increase in customers who use online grocery stores.
In an attempt to increase its presence in the UK market, Amazon recently announced that it would price match a small quantity of groceries on its website, offering the best deals available for Tesco Clubcard holders. This move was made in order to compete with discounters that have been taking away market share from the four major supermarkets. It will also allow Amazon to better target a demographic who is becoming more cost-conscious and has a lower disposable income.
Convenience
Amazon hasn’t been able to make a mark in the grocery market despite its ambitions. Amazon launched a fresh attack in its battle with the dominant incumbents in the UK last week, an action that could enable it to go from being an unimportant player to one of the most significant threats to the country.
The latest offering from Amazon is a partnership with Iceland which will allow Prime customers to purchase their full grocery shop at the online retailer and get it delivered at no cost. The service is currently available in London but will be extended to other cities by the year’s end in 2021. The company also launched an hour-long grocery delivery service in London. This will be extended to millions of Prime members across the nation.
The new services offer greater convenience to customers, offering them the option of shopping for groceries without leaving their office or home. The service can be accessed through the website or app, and provides various products, including fresh food and drinks, staple items, household items, and cosmetic and personal care items.
In addition to these convenient features, the website and app offer a variety of recipes that can be used to prepare quick meals. Moreover, the apps allow customers to store their shopping lists as well as track the status of their orders. They also include a search feature that makes it easy to locate specific products.
Retail experts have said that Amazon’s entry into the sector of grocery isn’t going to be simple. If it wants to become a serious competitor, it will need to remove the obstacles to entry. The requirement to sign up for Prime is a restriction that has been slowly removed over time. Amazon Fresh is no longer an add-on to Prime and customers can pay per delivery instead.
The size of the British supermarket market is an additional obstacle. It is highly competitive. As a result, it is difficult for Amazon to compete with supermarket chains like Tesco and Sainsbury’s unless it reduces prices. It may be possible to do this using its scale and matching Tesco’s Clubcard Prices across hundreds of food items.
Customer service
Amazon’s grocery delivery service makes it easy to procure your daily necessities. Customers can choose from a range of items from well-known brands. Shipping is free for orders above $50. The customer service representatives are able to assist you quickly and effortlessly locate what you are looking for. The company offers a rewards system that allows you to get free grocery shopping and shipping on certain items.
Amazon is a major player in the field of grocery retailing, even if it is not as popular as it is in the UK or the United States. Over the years, Amazon has invested in infrastructure and expanded their offerings. In the year 2018 Amazon Fresh was launched. Online grocery shopping is not yet a commonplace trend in the US. However, those who don’t want to travel to the grocery store are increasingly turning to it.
Amazon launched Amazon Pantry the service that allows customers to select household goods from a selection of 4,000 items. However, this service does not offer frozen and fresh food items. Amazon has been testing this service in London and is expected to roll out in other cities later this year.
Amazon’s new Prime service is designed to complement the existing Prime subscriptions. It has also partnered with grocers to offer its delivery services. This includes a collaboration between Prime and Morrisons that will allow Prime members the ability to purchase their entire grocery online, with delivery the next day.
At present, the service is only available currently in London and Home Counties. However, it will be extended to other areas by 2021. To make use of it you’ll need to have a valid postcode and an email address. The Amazon Fresh app guides you through the process for selecting your groceries and choosing an hour-long delivery time.