 | Amazon Fresh 2017Release date: April 11th, 2017 (120 pages) PDF/Powerpoint format. Price: GBP2,490.00 |
Abstract
Amazon’s share price keeps on rising and some analysts now speculate that Bezos’ aim is to create the first trillion dollar company in the world.
For this to happen the US$800bn food sector finally needs to be cracked by Amazon and our latest report lays out how this will happen.
The shake up will be radical and leave many failed b&m retailers in its wake.
The strategy is to meet every distinct shopper need and mission with a dedicated Amazon business unit (from pantry to .com to dash, echo to subscribe & save to prime Now to Fresh).
Fresh is the jewel in the crown, with self selecting prime membership skewing to the premium end, the most valuable shopper to have.
FMCG and other retailers should remember that Amazon will leverage its platform and marketplace model and that the threat will not only come from 1P, but from the multitude of artisanal players (butchers, bakers etc) Amazon will recruit to its ecosystem.
Amazon knows their shoppers already - from their past purchases and their digital footprint and they know shoppers much, much better than the competition. For Amazon it is now simply a matter of upselling.
What can the rest of the industry do now?
Table of contents
| Executive summary | p8 |
| Introduction | p16 |
| Amazon Fresh: the background, why the move into grocery? | p17 |
| Amazon: different business models, .com (1P and 3P), Pantry, Fresh, dash, Prime Now | p18 |
| Amazon: different business models, the fresh business | p19 |
| Amazon Fresh: logistics, .com integration, cooking videos | p20 |
| USA | p21 |
| Data: The online grocery market in $bn 2014-2017 | p22 |
| Data: Amazon grocery sales in $bn, Fresh sales in $bn, 2016 | p23 |
| Data: Data, key customer statistics, uplifts, basket sizes, the reasons behind Fresh | p24 |
| USA: Amazon Prime Now partnership with Sprouts | p25 |
| USA: Amazon Fresh – price drop, monthly plan | p26 |
| USA: Amazon Fresh – price drop, monthly plan, analysis | p27 |
| USA: Fresh In Chicago, Dallas and South Florida | p28 |
| UK | p29 |
| UK: Amazon Fresh and Morrisons – a transformational deal | p30 |
| UK: Amazon Fresh and Morrisons – leveraging manufacturing, vertical integration | p31 |
| UK: Amazon Fresh and Morrisons – what’s in it for Britain’s number 4 | p32 |
| UK: Amazon Fresh and Morrisons – four key implications | p33 |
| UK: Amazon Fresh and Morrisons – scaling the range and prime benefits | p34 |
| UK: Amazon Fresh – local & regional foods, tweaking the offer | p35 |
| UK: Amazon Fresh London – local food a real USP, decline of Hubbub | p36 |
| UK: Morrisons Prime Now link up | p37 |
| UK: Fresh expansion | p38 |
| Data: Amazon, Tesco, Sainsbury, Asda, Ocado, Waitrose, Morrisons pricing data 2017 | p39 |
| Fresh: Amazon Fresh leading the sector on price, February 2017 | p40 |
| Fresh: Amazon Fresh and the sector – price comparisons, June 2016 | p41 |
| Germany | p42 |
| Germany: the use cases for imminent online grocery deliveries | p43 |
| Germany: The importance of the 3P marketplace for Amazon Fresh | p44 |
| Germany: Amazon Fresh starting date revealed | p45 |
| Germany: Amazon Fresh logistics set up in Germany, all 3PLs? | p46 |
| Germany: Amazon Fresh, dual use warehouse in Munich | p47 |
| Germany: Amazon Fresh, starting date set in Berlin for April 2017 | p48 |
| Germany: Amazon recruiting Migros and Tegut as 3P supplier partners | p49 |
| Germany: the big bang announcement, DHL will provide logistics services | p50 |
| Data: Fresh and Prime Now sales forecasts for Germany in €m, 2016/7-2020 | p51 |
| Strategy section | p52 |
| Grocery Private Label | p53 |
| Private label grocery: the introduction | p54 |
| Private label grocery: will Elements become a premium line? | p55 |
| Private label grocery: prime only? Stronger negotiation position vs. FMCGs | p56 |
| Private label grocery: launch of prime exclusive, global roll-out? | p57 |
| Private label grocery: starting to take market share, data | p58 |
| Private label grocery: Presto!, the risks of manufacturing | p60 |
| Private label grocery: Wickedly prime is launched | p62 |
| Private label grocery: Elements vitamins and supplements | p63 |
| Private label grocery: operating in a supplement market rife with fraud | p64 |
| Physical, bricks & mortar, Grocery Stores | p65 |
| Stores: Analysis – introduction, three prototypes | p66 |
| Stores: Analysis – the issues of food spoilage | p67 |
| Stores: Analysis – long term strategy, B2B and a hybrid store? | p68 |
| Stores: Analysis – stores offer new possibilities for regional and localised ranges | p69 |
| The drive thru stores | p70 |
| Drive thru: Project X, August 2016 and first plans are surfacing | p73 |
| Drive thru: Project X – the Seattle catchment, operations | p74 |
| Drive thru: Project X – new technologies | p75 |
| Drive thru: Project X – March 2017 opening | p76 |
| The Amazon Go store | p78 |
| Amazon Go: getting rid of queues | p84 |
| Amazon Go: selling the technology on to other retailers? | p85 |
| Amazon Go: could become a game changer when labor costs are increasing | p86 |
| Amazon Go: how the sensor fusion technology works – the patents | p87 |
| Amazon Go: how the sensor fusion technology works II | p88 |
| Amazon Go: nine points to take into consideration | p89 |
| Amazon Go: nine details to consider when judging Amazon Go | p90 |
| Amazon Go: coming to the UK? | p91 |
| Amazon Go: teething problems, only works with 20 shoppers in store so far | p92 |
| The convenience stores | p93 |
| Project Como: the third prototype, drawing inspiration from Aldi and Lidl | p94 |
| Project Como: 2,000 Amazon Fresh grocery stores in the US over the next decade? | p95 |
| Project Como: 20-store pilot program for now, could it work? | p96 |
| Project Como: Amazon Fresh program on track, no updates on stores | p97 |
| Project Como: Amazon denies 2,000 store target categorically | p98 |
| Project Como: only three human workers per store? NY Post story | p99 |
| Project Como: the NY post non story? Robots on rooftops? Bezos denial | p100 |
| Restaurants & Foodservice | p101 |
| Restaurants: restaurant deliveries in Seattle, a Spotlight update | p102 |
| Restaurants: Amazon daily dish | p103 |
| Restaurants: Amazon taking on and copying Peach | p104 |
| Restaurants: Blue Apron-like recipe delivery service started in Q3 2016 | p105 |
| Restaurants: eyeing the UK market, starting a delivery service, Amazon Restaurants | p107 |
| Restaurants: Martha Stewart & Marley spoon debut on Amazon Fresh | p108 |
| Restaurants: How Amazon Fresh organises the logistics for the restaurant service | p109 |
| Recommendations for FMCG: the fall out from Amazon Fresh | p110 |
| Recommendations: FMCG partners, what to consider, Pantry vs. Fresh vs. .com | p111 |
| Recommendations: model out profitability for the next ten years on line by line basis | p112 |
| Recommendations: Omnichannel players, launching a 3P operation | p113 |
| Outlook: the Amazon Fresh opportunity going forward | p114 |
| Sources | p120 |
| Chart 1: USA data: The online grocery market in $bn, 2014-2017 | p22 |
| Chart 2: Fresh: Data, key customer statistics, uplifts, basket sizes, the reasons behind Fresh | p24 |
| Table 1: Amazon, Tesco, Sainsbury, Asda, Ocado, Waitrose, Morrisons pricing data UK, Feb 2017 | p39 |
| Table 2: Data: Amazon Fresh sales forecasts for Germany in €m, 2017-2020 | p51 |
| Table 3: Data: Prime Now sales forecasts for Germany in €m, 2016-2020 | p51 |
