Amazon’s move to online grocery delivery, and how it gives the company a competitive advantage
Amazon’s move to online grocery delivery, and how it gives the company a competitive advantage
The shift to e-commerce business has affected the Grocery business mainly the grocery stores at the least. This could be because of the food need-it-now status and perishability; therefore, making it difficult for grocery business to be transitioned into an online market platform. This does not mean that no business has ever tried this seemingly difficult business transition. Some organizations such as Webvan tried but failed because of the nature of the products offered in a grocery business. However, following the failures that were done by their previous counterparts and their reasons for failure, two e-commerce giants. Google and Amazon have opted to battle out with this form of business in which they expect different implications to befall the retail real estate market (Wells, 2013). With a purported $500 million investment into the online retailing, Google was ready to venture and face a clash with the then leading e-commerce retailer, Amazon.
With AmazonFresh, Amazon is planning to venture into an online grocery store with an intention to venture into a market where it expects to meet competition from regional online grocery players including FreshDirect. In my view, I think that one of the things that have pushed Amazon to venture into online grocery delivery is the presence of a larger market with online retail businesses (Castaldo, 2013). For instance, AmazonFresh can gain market across the world, and all that the company needs to do is to find deliveries in the different locations where the customers could be allocated. Also, Amazon might have considered the people mindset that carrying things is a thing of the past. Staggering home with up to 10 supermarket bags is unthinkable, and no one would like to find himself/herself in such circumstances.
I think that Amazon move to online grocery delivery will give it a competitive advantage. This is because most online customers of grocery products will believe that it saves their time to shop online. The customers have also relived the pain of having to carry several supermarket bags with them after shopping (Eaglescliffe, 2018). Also, by engaging in online grocery stores, Amazon makes it easy for customers to access online specials, and as such customers will be paying attention to Amazon products to get this special. In the process, Amazon expands its customer base.
My favorite grocery stores: What attracts me to it and what it has done to draw my patronage?
One of my favorite online grocery stores is Google Express. It is an online delivery platform which is powered by Google and which allows customers to shop online stores such as Costco, Walmart, Target, PetSmart, etc. through a Google express app. All a customer is required to do is to select what he/she wants to buy, pay for the item, and wait for the delivery to be done to the doorstep.
What attracts me to this online store is the convenience with which I can shop. Instead of planning to shop in the supermarket which takes quite a long time, I can click the application and do all the shopping in the comfort of my room. Also, compared with other online stores such as Amazon Prime, Google Express is convenient regarding delivery time (Liu, 2018). For example, while it takes up to 2 days for Amazon Prime to deliver a product to a customer, Google Express guarantees less than the 24-hour delivery of any product purchased by a customer.
One thing that the store has done to draw my patronage is that through its partnership with Costco, Google, Walmart, Target, PetSmart, etc., it is easier for me to do bulk shopping. I can shop from all these online stores through one platform, and my items will be delivered as one package; therefore, making my bulk shopping easier (Lutz, 2014). I think that the online store is currently doing its best and I have nothing in mind at the present that I can recommend the online store to do to retain my loyalty.
References
http://www.canadianbusiness.com/companies-and-industries/a-new-threat-for-big-grocery-2/
https://toughnickel.com/frugal-living/Pros-and-Cons-of-Online-Grocery-Shopping
https://www.digitaltrends.com/home/what-is-google-express
http://www.businessinsider.com/google-express-vs-amazon-prime-2014-10?IR=
https://www.cnbc.com/id/100916844
2
Chad
Class,
I think that Amazon’s move to the grocery sector is super interesting. I think they know how well they have done in regards to online retailing, so this move kind of seems like a fairly logical step. I think that it was pretty bold of them to move into perishable food items so fast, but I can only assume that they have done the proper research into what they are doing and know better than me. Of course, this might also be why they are expanding their grocery sales so slowly. I think that the quote from Kate Wendt hit the nail on the head, “You don’t want to start out day one with a huge volume” (Wells, 2017).
I don’t think that the sales necessarily give the company a competitive advantage. This is Amazon after all. They already are a monster company that threatens entire industries. I think that what it will do is give Amazon another item to add to its growing repertoire. Honestly, I think Amazon is primed to become the next mega corporation if it continues down the pretty successful path its on. I think that challenging grocery stores will take some time though. It will be hard to adapt to the changes that grocery stores can provide.
My favorite grocery store is local to my area. It’s called the Dorothy Lane Market (DLM). They have always provided service to the Dayton Ohio area by sourcing its meats and produce from local farmers. They have gone a slight step further though, as the rest of the items in the store are either produced within the store itself or comes from a certified organic retailer. They also have their own bakery and coffee shop within the store. There are three locations, but the one I go to is the original store. It’s small. It’s quaint. It’s somewhere my grandma used to take me for treats when I was little. Amazon can most likely provide everything that DLM sells, and they might be able to sell it cheaper, but I think that the hardest obstacle for them to overcome will be specifically holding the food we buy.
There are many things that I would be willing to buy online. Big stores, like Wal-Mart, offer things that I don’t want to spend money on at DLM. Crackers for example, or a bag of sugar. I could make a huge list. I tend to buy the cheap knock-off brands for those items because they generally come from the same supplier, just with a different label. I think Amazon would be good for those items. Choosing the right steak, or finding the right apple though? That’ll be a hard sell.
Chad
References
Wells. (2013). Your next meal may come compliments of Amazon. Retrieved from https://www.cnbc.com/id/100916844
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I agree with my colleague’s assertion that transition to e-commerce has had far-reaching impacts on the grocery business. However, this has been necessitated by perishable nature of foods, and hence it is difficult for…………………
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