Independents should not feel threatened by Amazon’s online grocery expansion
Independent retailers should not fear Amazon’s ramping up of its online grocery offer, according to industry insiders.
The multinational is offering free same-day delivery on Amazon Fresh in London and the South East and launching a partnership with supermarket chain Morrisons.
As of 19th August, Amazon Prime members can do their full food shop in the ‘Morrisons on Amazon’ store and receive free same-day delivery. This announcement comes less than a month after the multi-billion-pound company offered subscribers free same-day delivery on their Amazon Fresh grocery service, with the giant aiming to roll both initiatives out nationwide.
Chief commercial officer of Boroughbox Alec Paterson knows the anxiety that the brand’s move into the market creates. When Amazon Fresh first launched in the UK in 2016, Paterson was working with Hubbub – an Ocado-style operation which worked with independents. “Our investors walked away from the table at the last moment,” said Paterson, “because the feeling was that Amazon was going to nail it.”
But that hasn’t been the case. Today Amazon has just a 3% share of the online grocery market, and Paterson believes that, while it can be viewed as a threat, it is also an opportunity.
“Selling online can be very costly, so is this something that you want to do directly, or do you work with the largest logistics company in the world who can offer your customers a good service.”
Amazon Fresh is already supplied by a host of artisan producers, including Gail’s Artisan Bakery, butchers C Lidgate and Paxton & Whitfield and is searching for other local, independent suppliers.
Clare Jackson, owner of Suffolk-based cheese stores Slate Cheese who also has a strong online offer, is not concerned by the giant’s expansion of its online grocery operation. “Buying cheese from Amazon is more of a supermarket experience and buying from us is totally different and that experience translates into the online space as well.”
Slate’s online customers can get the same level of expertise as her in-store trade. “People call or email us before they make their purchase to discuss their choice. We can answer all the questions people have and give advice,” she said.
However, Jackson said that the effect Amazon has had on the online market can already be felt. “Customers sometimes say that our delivery charge of £5.95 feels disproportionately high and that it puts them off. They are used to free delivery, but there is a huge cost to delivering fresh produce.”
Despite this, she added it is the “bespoke” service that indies offer that their customers want. “People who choose us are looking for the more bespoke, more personal experience and the difference in service that independents can provide will still be there whether that’s online or in a physical shop.”