Amazon Fresh 2017

Amazon Fresh 2017

Release date: April 11th, 2017 (120 pages)
PDF/Powerpoint format. Price: GBP2,490.00


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