The Amazon Fresh grocery delivery service, currently being pioneered in a number of US cities, is set to deliver somewhere new: the UK. International e-commerce delivery specialists ParcelHero say that the news Amazon Fresh will be delivering to some UK homes from as early as this September, first reported in The Times on July 17, comes as no surprise to the industry.
ParcelHero’s David Jinks MILT says: ‘The secret behind the swift introduction of Amazon Fresh into London is the success of the company’s new delivery service, Amazon Logistics. Having its own distribution network enables Amazon to bypass traditional suppliers, such as the Royal Mail, and ensure its Prime members get a wide choice of delivery options, including same day deliveries in areas of the Capital.’
David explains ‘The Fresh service delivers a selection of fresh, frozen and prepared foods to customers, either the same day the order is placed or the day after. One difference between Fresh and already established UK services such as Ocado is that Amazon typically teams-up with local businesses such as delis and bakeries to widen the range of local produce available, and can also deliver your other Amazon orders.’
David believes the new UK Fresh service makes sense for Amazon. ‘Amazon has been developing its own logistics network for some time and now has the capacity to deliver change in this sector of e-commerce. It has already rolled out Amazon Fresh in its home town of Seattle and in areas of California and New York; but it makes even greater sense in urban areas of the UK, where the take up of grocery delivery has been far swifter than in the US. Less than one percent of grocery sales are online in America, whereas it is already 5% and climbing swiftly in the UK.’
David observes: ‘The Times quotes one retail insider claiming that Amazon Fresh is targeting 2% of the UK’s estimated £149 billion- a-year grocery market. That’s about three times the market share of Ocado, the biggest online-only grocer, which has £1 billion in sales.’
Adds David: ‘The thinking behind Fresh is partly to push membership of Amazon’s lucrative Prime service, which locks people into the company. In the US Amazon Prime members have had special discounts on membership of the Fresh delivery service. The pricing structure for the UK has yet to be announced, but we believe there will definitely be benefits for Prime members.’
David concludes: ‘ParcelHero recently marked the 20th anniversary of Amazon with a significant new industry report, Amazon’s Prime Ambition, revealing the scale of Amazon’s plans to become the conduit through which all aspects of e-commerce and logistics flows. The introduction of Amazon Same Day and Fresh services was predicted in our report, which shines a spotlight on the extent of Amazon’s plans to revolutionise the supply chain.’