E-commerce delivery expert Fastlane International says the grocery industry is significantly underestimating the impact of Amazon Fresh in the UK, and Walmart’s Uber tie-up
The much anticipated launch of Amazon Fresh in the UK will deal a heavier blow to the ‘big four’ supermarket chains than many industry analysts imagine, says the global delivery experts Fastlane International. And with Walmart (owners of UK supermarket Asda) trialling deliveries with Uber in the US, the grocery market could be transformed in the next few years, Fastlane claims.
Fastlane’s head of consumer research, David Jinks, said: “Industry analysts are claiming today that Amazon in the UK will capture no more than 3% of the grocery market from the current big players. That’s probably what book sellers told themselves 20 years ago; the electronic goods market believed 10 years ago, and clothing stores five years ago. But the fates of Borders, Comet and now BHS highlight what happens when Amazon moves into your industry.
“Amazon’s recent tie up with Morrisons should worry the likes of Asda, Sainsbury’s and Tesco. Amazon is spending big sums on its delivery network and that means it needs more than 3% of the market to recoup its investment. That’s why its Fresh launch in London also includes tie-ups with well-known local food producers such as the confectioners Konditor & Cook and Gail’s Artisan Bakery, to fulfil their deliveries.
“Amazon is offering free deliveries for the first 40 days in an aggressive attempt to get consumers to switch their buying habits. Explains David: ‘Amazon’s Prime members shop 50% more with Amazon than non-members. By tying-in the Prime and Fresh services Amazon is locking in more customers. It’s worth spending the significant sums involved in developing its logistics infrastructure if it means Amazon becomes the default online provider in yet another area of retail for many consumers.
Online only providers could feel the impact even further, claims Fastlane. Companies such as Ocado are facing the same issues that the e-reader industry providers Blinkbox Books, Diesel ebooks and now Nook in the UK had to compete with. None of these names survived the test.
But the grocery market shake-up won’t stop there, predicts Fastlane. Jinks said: “Walmart is conducting trials with Uber in the USA to deliver food products. It’s a logical next step for the taxi App, which is just as suited to deliver goods as people. Walmart will be able to offer near instant deliveries on its groceries; giving it a significant advantage over competitors. We believe the UberRush and UberEats services are on their way to the UK, and the power of crowdshare Apps in the grocery delivery market will be another blow to traditional retailers.”
For more information about Amazon’s game-changing approach to retail deliveries and the growth of ecommerce see: https://www.wedelivertheworld.