- 10 June 2016
- Transport / Logistics Services
Fastlane International has warned the grocery industry not to be complacent about Amazon’s move into their market. There’s also a warning that Walmart (owner of Asda) is starting to use Uber for food deliveries there, and between the two retail giants there will be an earthquake in the online grocery delivery market.
In a statement published on Thursday, Fastlane International said, “The much anticipated launch of Amazon Fresh in the UK will deal a heavier blow to the ‘big four’ supermarket chains than many industry analysts imagine. And with Walmart (owners of UK supermarket Asda) trialling deliveries with Uber in the US, the grocery market could be transformed in the next few years.”
Fastlane’s Head of Consumer Research, David Jinks, added, “Industry analysts are claiming that Amazon in the UK will capture no more than 3% of the grocery market from the current big players. That’s probably what book sellers told themselves 20 years ago; the electronic goods market believed 10 years ago, and clothing stores five years ago. But the fates of Borders, Comet and now BHS highlight what happens when Amazon moves into your industry.”
Jinks continued, “Amazon’s recent tie up with Morrisons should worry the likes of Asda, Sainsbury’s and Tesco. Amazon is spending big sums on its delivery network and that means it needs more than 3% of the market to recoup its investment. That’s why its Fresh launch in London also includes tie-ups with well-known local food producers such as the confectioners Konditor & Cook and Gail’s Artisan Bakery, to fulfil their deliveries.”
AmazonFresh is tied in with the Prime service, and Fastlane suggested that this is an effective means of “locking in more customers”.
“It’s worth spending the significant sums involved in developing its logistics infrastructure if it means Amazon becomes the default online provider in yet another area of retail for many consumers,” said Fastlane.
The likes of Ocado could be hit hard by AmazonFresh, claimed Fastlane.
“Companies such as Ocado are facing the same issues that the e-reader industry providers Blinkbox Books, Diesel ebooks and now Nook in the UK had to compete with,” commented Fastlane, adding ominously: “None of these names survived the test.”
This won’t stop with the AmazonFresh move. Jinks explained: “Walmart is conducting trials with Uber in the USA to deliver food products. It’s a logical next step for the taxi App, which is just as suited to deliver goods as people. Walmart will be able to offer near instant deliveries on its groceries; giving it a significant advantage over competitors. We believe the UberRush and UberEats services are on their way to the UK, and the power of crowdshare Apps in the grocery delivery market will be another blow to traditional retailers.”
With the UberRUSH API becoming publicly available, retailers will be able to build this into their existing websites. Currently UberRUSH is limited to three major cities in the US but it has indicated that it will move to a number of other US cities soon. Uber has the financial muscle to do this, what with the Saudi Royal Family investing $3.5bn in it just last week…