Certain sectors of the online retail industry are currently experiencing rapid growth, particularly because of the convenience and safety that internet-based shopping offers in the time of a global pandemic.
For example, food delivery businesses, which were already growing in popularity over the last few years, are now enjoying even greater demand. These include restaurants and fast-food chains, but grocery deliveries are poised to become the next big thing.
It was on 28 July 2020 when Amazon Fresh, a US e-commerce company, extended their services to London and the South East. This service aims to bring convenience to many UK households by delivering essential goods straight to their doors.
Some people are concerned about how this change in the market will affect existing supermarkets and grocery stores. But are their worries justified?
What is Amazon Fresh?
Amazon Fresh is a subsidiary of the US-based e-commerce giant, Amazon. It started in 2018 when the company acquired the upmarket grocery chain, Whole Foods.
Based on the change of attitude and behaviour in consumers with regards to online purchases, Amazon decided to extend its product range and services. Their intention was to provide convenience to their customers by delivering consumer goods and essentials straight to their homes, whether on the day of their purchase or the following one.
Apart from this speedy service, however, the company’s biggest asset is its supply-chain expertise, which many local supermarkets and small grocery retail stores see as the real threat.
How will it impact UK groceries and supermarkets?
Amazon has a well-established and powerful brand presence. The company and its iconic logo are instantly recognizable across the globe. Many people choose to do most of their online shopping on Amazon because they trust the company and enjoy the vast selection of products available.
For this reason, many local supermarkets fear that Amazon Fresh will soon dominate the market. The company only needs to go through a few steps and changes, and consequently attract customers from most of the UK. When that happens, local business owners fear that they will experience a considerable drop in their sales and revenue.
With strong brand awareness and brand loyalty, Amazon Fresh will surely become a tough competitor for local UK supermarkets. Experts believe that the only reasonable solution for smaller brands to compete with Amazon Fresh is to either lower their prices and fees or provide same-day and next-day delivery services. These solutions are undoubtedly tough decisions to make, but it appears that companies will have to face them if they are to survive this change.
The expansion of Amazon Fresh services into the UK will benefit many of its citizens. However, local supermarkets will struggle to compete with such a huge corporation at the same time.
Due to Amazon’s strong capability to attract customers with little effort, smaller businesses might get left behind, losing customers and much-needed sales. To cope and survive the situation, UK supermarkets will need to lower their prices or compete with Amazon Fresh’s delivery services.
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