 | Amazon 2013: Online GroceryRelease date: May 21st, 2013 (118 pages) PDF/Powerpoint format. Price: GBP2,495.00 |
Abstract
For Amazon, grocery is the big opportunity, it is after all the biggest category in retail in any market, shoppers will always need to eat and drink. Grocery is also where Amazon’s future growth will come from, then again it is also the hardest sector to make work profitably online.
That said, grocery has been the fastest growing category on Amazon in the US for two years now. So far the biggest growth has come from the shelf stable products Amazon sells through 1P (Amazon Retail) and 3P (its marketplace).
In both business models, Amazon and AmazonFresh, the retailer is over-indexing with younger families and higher income groups. This alone demonstrates why joining the ecosystem has become so attractive to FMCG brands. Amazon has found that once a consumables shopper has converted to an online buyer, they buy across all CPG categories.
Amazon is now ramping up its online grocery offer outside the US as well. We answer the questions whether there will be a shift from shelf stable to fresh on the cards, and what the online grocery strategy for the marketplace is and what the plans are for Europe and FBA.
Table of contents
| Executive summary – new solutions on the horizon | p11 |
| Amazon Grocery UK | p19 |
| UK: most developed online grocery market in the world | p20 |
| Amazon: UK progress and intentions, recent key developments | p21 |
| Amazon: UK third biggest foreign market, dominating the sector, competition from Tesco | p22 |
| Recent developments: Record Christmas, click & collect, convenience stores partnerships | p23 |
| Recent developments: Amazon’s lockers, the Co-op cooperation in the UK | p24 |
| Amazon Grocery USA | p25 |
| Amazon: Grocery in USA, Seattle’s Amazon Fresh, own delivery network | p26 |
| Amazon Fresh: Seattle spotlight, grocery marketplace version 2.0 | p27 |
| Amazon Fresh: Doorstep delivery fee, future outlook, heading to California? | p28 |
| Amazon Fresh: Data, key customer statistics | p29 |
| Amazon: Tote’s demise, weekly subscribe & save, challenge to Walmart | p30 |
| Amazon: The primary site, the big prize, the marketplace | p31 |
| Amazon: The online grocery opportunity in the US, Amazon shopper data | p32 |
| Amazon: Quidsi – groceries on soap.com, Vine.com – the all organic option | p33 |
| Recent developments: Adding on impulse and split packs, a pointer towards online grocery | p34 |
| Amazon Grocery Germany | p35 |
| Amazon: the two part structure in Germany, one of the toughest grocery markets | p36 |
| Germany: 1P and 3P delivery issues | p37 |
| Recent developments: Migros private label on Amazon.de | p38 |
| Recent developments: DM partnership in Germany | p40 |
| Recent developments: DM - Amazon not a traditional marketplace relationship | p41 |
| Recent developments: DM decides against buying Schlecker’s online arm, while… | p42 |
| Recent developments: … Amazon widens health & beauty category in Germany | p43 |
| Amazon: Germany most important foreign market, taking a quarter of DE ecommerce | p44 |
| Amazon: Germany Packstationen prevent need for proprietary Amazon lockers | p45 |
| Amazon: … big opportunity further abroad for Amazon logistics | p46 |
| Recent developments: DHL trials parcel boxes in Bonn and sets up its own marketplace | p47 |
| Advertising, KPIs, data collection | p48 |
| Amazon: collecting data, KPIs, algorithms, upselling, personalisation | p49 |
| Amazon: Algorithm, item to item collaborative filtering, recommendations uplift | p50 |
| Amazon: Key engagement metrics, rigorous AB testing | p51 |
| Amazon: the move towards brand stores | p52 |
| New concepts: advertising and the Adzinia business | p53 |
| Amazon: collaboration potential, the business strategy | p54 |
| Amazon: advertising – the Adzinia business, exploiting the funnel opportunity | p55 |
| Amazon: perfect visibility of the online shopper, algorithm opened up to others | p56 |
| Amazon: privacy issues, push for marketplace, funding deliveries and Amazon Mom | p57 |
| Case examples: Collaboration in advertising | p59 |
| Amazon: On and offline FMCG lift, offline $ multiplier of online advertising – Olay | p60 |
| Amazon: Brand collaboration in US, couponing and wraps – Crest | p61 |
| Amazon: coupons | p62 |
| Amazon: the coupon opportunity, funding deliveries | p63 |
| Amazon: the buy box – the path to one click shopping | p64 |
| Amazon: the buy box | p65 |
| New concepts: branded store fronts and subscription models | p66 |
| Amazon: Branded store fronts | p67 |
| Amazon: Dynamic brand stores, conversion rate uplift | p68 |
| Subscribe & save: data and KPI behind the service | p69 |
| Amazon: Dynamic brand stores – Germany | p70 |
| How to work with Amazon as a FMCG player | p71 |
| Amazon: three key teams, margin neutrality for now, chasing grocery market share | p72 |
| Recommendation: how to partner with Amazon, establishing an internal infrastructure | p73 |
| Recommendation: how to partner with Amazon, defining targets and next steps | p74 |
| Recommendation: exclusive Amazon metrics and off Amazon impacts | p75 |
| Recommendation: scorecards, marketing mix models | p76 |
| Recommendation: be aware of the ecosystem’s drawbacks | p77 |
| How to work with Amazon as a FMCG player: 5 key points | p79 |
| Cooperating with Amazon: 5 key points FMCG companies should consider (1/2) | p80 |
| Cooperating with Amazon: 5 key points FMCG companies should consider (2/2) | p81 |
| Amazon: KPIs Amazon will measure a FMCG partner on | p82 |
| Key recommendation: how to treat Amazon | p83 |
| How to manage price competition from the marketplace | p84 |
| Amazon: marketplace, listing and pricing risks, 1P and 3P competition | p85 |
| Amazon: not a price leader but follower, price matching, on promotion 52 weeks a year | p86 |
| Amazon: problem to intensify, 1P and 3P’s unauthorised distribution | p87 |
| Amazon: unauthorised distribution on the marketplace | p89 |
| Recommendation: how to minimise disruption, new policy regime 90 Recommendations | p91 |
| Recommendation: the MAP policy, monitor and enforce – to a degree | p92 |
| Recommendation: the MAP policy – only a US solution? | p93 |
| Amazon: MAP risks - competition authorities are investigating Amazon DE already | p94 |
| Key recommendation: legal issues around pricing | p95 |
| Key recommendation: safeguarding existing retailer relationships on joining Amazon | p96 |
| Logistics: the move to same day delivery | p97 |
| Amazon: it’s all about the supply chain, same day delivery, loads utilisation | p98 |
| Amazon: Collaboration, lockers roll out and next stage of online evolution | p99 |
| Amazon: Fulfillment centre rollout, load factors, prime | p100 |
| Amazon: the cost of doing business, shoprunner delivering from the store estate | p101 |
| Amazon: same day delivery – the conversion and take up results from the first tests | p102 |
| Amazon: split cases, customer centric supply chain | p103 |
| Amazon: Locker roll out as precursor to full on assault on online grocery in the US? | p104 |
| What is the potential for Amazon private label grocery? Survey results | p105 |
| Amazon: 2013 – survey results | p106 |
| Amazon: 2013 – active Amazon shoppers | p107 |
| Amazon: 2013 – prime memberships | p108 |
| Amazon: 2013 – active shoppers in Amazon consumables category | p109 |
| Amazon: survey results – purchasing intent for Amazon private label confectionery | p110 |
| Amazon: survey results – purchasing intent for Amazon private label toiletries | p111 |
| Amazon: survey results – purchasing intent for Amazon PL disposable paper products | p112 |
| Amazon: survey results – purchasing intent for Amazon private label bottled drinks | p113 |
| Amazon: survey results – purchasing intent for Amazon private label shelf stable product | p114 |
| Amazon: survey results – purchasing intent for Amazon private label fresh produce | p115 |
| Amazon: survey results – purchasing intent for Amazon private label pet food | p116 |
| Sources | p117 |
| Chart 1: Amazon Fresh: Data, key customer statistics | p29 |
| Chart 2: Amazon: The online grocery opportunity in the US, Amazon shopper data | p31 |
| Graph 1: Amazon: 2013 – active Amazon shoppers | p107 |
| Graph 2: Amazon: 2013 – prime memberships | p108 |
| Graph 3: Amazon: 2013 – active shoppers in Amazon consumables category | p109 |
| Graph 4: Amazon: survey results – purchasing intent for Amazon private label confectionery | p110 |
| Graph 5: Amazon: survey results – purchasing intent for Amazon private label toiletries | p111 |
| Graph 6: Amazon: survey results – purchasing intent for Amazon PL disposable paper products | p112 |
| Graph 7: Amazon: survey results – purchasing intent for Amazon private label bottled drinks | p113 |
| Graph 8: Amazon: survey results – purchasing intent for Amazon private label shelf stable product | p114 |
| Graph 9: Amazon: survey results – purchasing intent for Amazon private label fresh produce | p115 |
| Graph 10: Amazon: survey results – purchasing intent for Amazon private label pet food | p116 |
