Fresh service will be offered without fee to millions of Prime members nationwide
"The company said on Tuesday it would scrap the extra charge and expand Amazon Fresh “to millions of Prime members across the UK before the end of the year”. That would pose a far more serious challenge to incumbents. Shares in Tesco, J Sainsbury and Ocado fell up to 1 per cent on Tuesday, although they closed with smaller losses. Nick Carroll, associate director at market researcher Mintel, said Amazon currently had just 3 per cent of the UK online grocery market, compared with Ocado’s 14 per cent and Tesco’s more than 30 per cent."
Jonathan Ely FT 28th July 2020
He goes on to write: -
"Natalie Berg, founder of consultancy NBK Retail, said the company was “hitting the nuclear button”. “It is one of the boldest moves they have ever made . . . the Covid pandemic has presented them with an opportunity to tighten their grip on ecommerce,” she added. “They are using the frequency aspect of food to bait people into their ecosystem.”
The word ecosystem might strike fear i to incumbents. Not just in the grocery market but in many sectors.
Covid-19 has seen a switch to online buying and delivery and customers will expect an Amazon-esque user experience and journey from all suppliers e.g. insurance.
Time to anticipate competition and do something about it.
He said that while Amazon did not yet have the capacity to rival the likes of Tesco, which has been fulfilling more than 1m orders a week during the pandemic, it would probably target the urban areas where online food shoppers are disproportionately located. “There is already a significant amount of switching in online grocery,” he said. “You are only as good as your last promotion.”