FMCG will be core to future business at Amazon, VP reveals at IGD Convention

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Kavan: FMCG key going forward

Kavan: FMCG key going forward

FMCG will be a fundamental building block of Amazon’s future customer proposition, according to its VP Ajay Kavan.

Speaking at the 2012 IGD Convention Kavan said Amazon aims to offer everything a customer is looking to find and buy on line.

He highlighted its advantages – it has no shelf space costs and doesn’t have to attempt to second guess customers, they make their own choices.

While media had the lion’s share of sales on Amazon in Q4 2007 at 59% in Q4 2011 it had fallen to 34% and FMCG or consumables will become more important in future, said Kavan.

Key categories are grocery, health & beauty, baby and pets, he added.

Kavan revealed Amazon was targeting mums with these sectors and said there were now 7,000 grocery and health & beauty products available on line.

Kavan highlighted Amazon’s new Amazon Family membership programme, launched 10 days ago. It is aimed at parents of young children and is designed to help them find and save on everything they and their family needs.

It offers benefits including money off in the baby store, free one-day delivery, and offers.

Kavan said it was designed to change the way consumers shop. He also presented Amazon’s Prime, which offers free next day for an annual subscription; and Subscribe & Save, which offers a 10% discount on items consumers use regularly, such as nappies, coffee etc. According to Kavan, Subscribe & Save increases brand loyalty and now offers 20,000 products to which shoppers can subscribe.

Other new developments include Amazon Fresh, a full service grocery delivery business launched in Seattle in the US, offering ambient, frozen and fresh products; plus Quidsi, vertical online websites in categories including diapers, pets and toys.

In the UK, meanwhile, Amazon has launched lockers as self-service collection points in convenient places and has a relationship with Collect+ providing collection points in independent and convenience stores.

Kavan offered four top tips to maximising sales on Amazon:

1. To leverage the lack of shelf space constraints and offer the full product range and provide high quality information and images
2. Make the best use of advertising opportunities
3. Engage with services such as Amazon Family and Subscribe & Save
4. Find ways to optimise the supply chain for online selling including the move to frustration free packaging with boxes optimised for home delivery and simultaneously reducing packaging costs.