Interesting development – Amazon are moving into groceries.
Apparently the market leaders Ocado have never made a profit in their 10 year history. I presume this is largely because of the expense of the distribution network which of course Amazon already have in place. At the moment it’s just non-perishable items (no meat or veg) but I presume they’ll need to invest in some refrigerated vans before long – I can’t see people bothering to order meat/veg/fruit/bread from Sainsburys/Ocado/Tesco and everything else from Amazon.
There’s still some work to do on the website too to get it a bit more geared towards the needs of food shoppers rather than book shoppers (ie a weekly shopping list).
Another of the strengths of the supermarkets is their own-brand, cheaper alternatives to much of what they sell. How will Amazon compete unless they have their own Amazon branded baked beans etc and perhaps their own even cheaper Amazon Basics/Value range?
All that said, I wouldn’t bet against Amazon – they’ve gone from being just a book seller to being the first place I look for books, music, DVDs and electricals so why not food?
Another important question is whether they will keep the “buyer reviews” functionality for the food section. I look forward to reading people enthuse about a particular loo roll or packet of crisps!
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