Blog: Can Amazon deliver on groceries?

Catherine Sleep | 19 July 2006

For some time Amazon has been known as the world’s largest bookseller, but it is well on its way to becoming the world’s largest purveyor of anything and everything, including, most recently, groceries. Can it succeed where others have failed?

The UK has arguably the most developed online grocery retail market in the world, with massively strong private label store brands, and it is hard to see Amazon successively taking on the leading supermarkets here.

But the US is different: there is no outright market leader, with various chains performing strongly in different regions. Amazon is to concentrate on non-perishables, which saves it from suddenly having to acquire expertise in the technical challenges of the chill chain.

Moreover, the company has leveraged the expertise of food distributors who bring complementary expertise to the table. Natural and organic foods retailer Wild Oats sells many of its private-label products on the Amazon site, and many of the leading manufacturers who have signed up with Amazon already sell their goods through other online sites.

Finally, customers are comfortable buying other things from Amazon, so why not non-perishable food?

The one serious stumbling block that I can see is that consumers may not be prepared to divide their grocery shopping into two parts: the non-perishables that they can buy on Amazon, and the perishables that will need to be sourced elsewhere. The other potential problem is that many of the products are only available in multipacks. But then, that is exactly when you want them delivered to your door, so it may prove a boon for the majority of shoppers.

Amazon grocery site


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