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Amazon Fresh: moving into the food business or an ulterior motive?

By Fiona Ness on Mon 18 August 2014 in Topical

Amazon Fresh has been available in parts of the USA since 2007, and as this service expands further across the states there are rumours that it won’t be long before we see Amazon Fresh vans in the UK.  

However, for a company who has recently warned of losses of up to $810 million in the next quarter, this seems a fairly odd venture.

CEO Jeff Bezos has reportedly claimed that in order to catch up with the likes of Walmart, which has sales of $475 billion, Amazon must master the art of selling clothes, but more importantly food.

So what does Amazon Fresh have to offer that sets them apart from other online grocers? Quite simply, fast deliveries. Their website promises that orders placed before 10am will be with you by dinner and you can have orders placed before 10pm by breakfast.

Amazon are clearly focussing on the logistics of same and next day delivery, perhaps even more than the move into the food industry. Well, that’s what the sceptics are saying.

Terry Drayton, former CEO of HomeGrocer, was originally approached to head up Amazon Fresh, but now believes that Amazon are using food delivery as a method to test faster deliveries. He claims that “strategically they’re just too smart to be farting around… the value of same-day delivery far outweighs anything they could do with groceries.”

However, in an ever time conscious world, if Amazon manage to use their grocery service to crack same day deliveries, it will serve as a useful purpose. Amazon’s delivery timescales will become far more competitive than other retailer and grocers, potentially becoming more appealing to customers.

What does this mean for you?

Amazon Fresh is highlighting the want for same and next day delivery – something which could affect the service your customers expect. Even now, you probably receive some orders that customers come to collect as they are needed ASAP.

54% of shoppers leave a site if estimated delivery is more than 5 days and 70% will add extra items to their basket to meet a free delivery threshold. Delivery is therefore a key factor in online selling and Amazon are planning to raise the bar.

Amazon are a huge company, and you be thinking all this is irrelevant to you – but think about it – if a competitor can offer the same products as you, but via a more convenient, quicker method, then you could lose out.

If you think your website doesn’t give your customers the service they expect why not speak to one of our consultants  or get  more information here.