Amazon Prime Day works for gadgets. Could it sell cereals?
AMAZON.com proved it can use bargain buzz to sell a lot of gadgets on a random day in July. This year, it’s hoping excitement around Prime Day gets shoppers to change how they buy groceries.
Amazon’s fourth annual Prime Day — 36 hours of sales beginning July 16 — will be its first since closing the US$ 13.7 billion purchase of Whole Foods Market. It is offering discounted strawberries, chicken breasts and cod fillets to lure people into its brick- and-mortar stores, as well as enticements to get them to try grocery delivery for the first time.
Success for Amazon will be measured by how many people switch up their routines in response to the promotion and develop new habits. The US$ 800 billion grocery market has been hard for Amazon to crack since so many shoppers already make weekly trips to supermarkets and big-box stores run by the likes of Kroger and Walmart. Retailers have also stepped up their own digital offerings, including a buy- online-pick-upin-store option that combines the ease of online shopping with the instant gratification of a quick run to the nearby market.
“They’re unlikely to lure a customer away, but maybe they can take a bit of the spending,” said Jennifer Bartashus, a retail analyst at Bloomberg Intelligence. “Your average Kroger shopper isn’t going to meaningfully change their shopping pattern based on being a Prime member. It takes a long time to change those habits.”
Amazon had grocery sales of
They’re unlikely to lure a customer away, but maybe they can take a bit of the spending. Your average Kroger shopper isn’t going to meaningfully change their shopping pattern based on being a Prime member. It takes a long time to change those habits.
US$ 2 billion in 2017, representing 18 percent of the online market in the US, according to One Click Retail estimates. That’s a tiny fraction of overall grocery spending, but Amazon proved with books and electronics how quickly habits can change. Online grocery sales will grow to US$ 100 billion as soon as 2022, with 70 per cent of households ordering groceries online, according to the Food Marketing Institute and Nielsen.
That’s why Amazon is promoting so many grocery offerings on Prime Day, trying to extend the loyalty of 100 million global Prime members to the food aisle. Prime members, Amazon’s most active shoppers, pay monthly or annual fees for shipping discounts, movie streaming and other services.
After a decade of trying to sell fresh food online, Amazon found that most discerning foodies want to inspect fresh veggies and meat in the flesh before buying.
“They want people to realize how much stuff in their kitchens they don’t need to schlep to the store for anymore,” said Paco Underhill, founder of behavioural-research firm Envirosell. “Amazon wants to train people to shop differently. Prime Day is an opportunity to introduce them to that new form of shopping.”
Jennifer Bartashus, a retail analyst at Bloomberg Intelligence