As speculation mounts that Amazon will roll out its grocery delivery business to 30-40 US markets in 2014, Profitero customer Ocado – the largest dedicated online supermarket by turnover in the world – believes Amazon’s push to sell groceries is more of an opportunity than a threat, awakening global grocers to the challenge they are going to face.
According to Ocado CEO Tim Steiner, Amazon’s move into selling groceries online will encourage big international retailers to look for partners to set up in e-commerce.
“What Amazon is clearly doing is awakening global grocers to the online challenge they are going to face and they are accelerating the opportunities for us as a platform provider”, Steiner commented at the recent Retail Week Live conference.
According to Steiner, “As we grow online and as the stores get cannibalized, the economics are going to shift so wildly in favour of the online grocer…that it is going to become the cheapest place to get groceries, with more selection at lower prices.“
The Ocado CEO continued, “Grocery retailing over the next 20 years is going to be driven by technology. Ask me who willl be our biggest competitor in online grocery in 20 years time, is it likely to be Tesco or Amazon? I would place my money on Amazon.”
Amazon is planning to expand its AmazonFresh grocery business within the US this year, with speculation that it could roll out its service to 30-40 markets by the end of 2014.
Amazon is also reported to be launching in Germany in September, its second biggest market, prompting big retailers in the country to seek to set up online operations. The move is likely to shake up competition in a market where online grocery currently makes up a very small share of the market.
Grocery analyst IGD forecasts that online grocery sales will roughly double from 2012 to 2016 in the five main northern European markets of Britain, France, Germany, Switzerland and the Netherlands.
Discover how Profitero delivers critical pricing intelligence to more than 40 global retailers, including supermarkets Ocado, Tesco and Waitrose, helping them provide better value to customers. Email us at firstname.lastname@example.org or visit www.profitero.com to find out more.
Profitero is also sponsor of IGD’s Online & Digital Summit 2014, which will focus on how grocers can win in the new online environment.
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