Is the Land Down Under ready for AmazonFresh?
After much speculation about the possible entry of online retail giant in Australia’s thriving supermarket industry, it has finally been confirmed that AmazonFresh is arriving in Australia.
AmazonFresh has been growing steadily in the United States since last year, stretching its reach to six major states and about 16 cities. It has also reached the United Kingdom where it established its services to 128 postcodes in Central and East London. But, moving as far out as the Pacific could be a bold move for this e-commerce leader.
Over the last decade, the supermarket industry in Australia has been highly competitive with the entry of ALDI in the early 2000s against household names Coles and Woolsworth. However, despite the growing supermarket industry, the two biggest players have continuously thrived at keeping their profit margins. These supermarkets keep the competition at bay with different pricing strategies and the introduction of private-label products to sustain price deflation and attract low- and middle-income families. With the growing interest on online shopping especially in a typical millennial family, will AmazonFresh have an impact in the supermarket trend in Australia?
While AmazonFresh entrance in the continent may signal a different buying pattern for Aussie consumers, an Australian research institute says otherwise. In an article from the Australian Food News, Roy Morgan Research said only around 3% of Australians bought their groceries online from their 4-week period research. Customers still preferred brick-and-mortar supermarkets for its retail entertainment offers while shopping. These supermarkets have add-ons such as in-store cafes, free tastes, and cooking demonstrations that online groceries can’t provide.
But too early to fret for AmazonFresh. Roy Morgan mentioned, however, that since Amazon’s online grocery shopping is something new to the Australian consumer market, this might create a hype and kickstart the interest among customers. While there’s an increasing demand for online services, Amazon’s early move to launch AmazonFresh in Australia could be a pioneering effect for the e-commerce leader.
Apart from the technology, Amazon was also known for delivering competitive prices for its products. The effective pricing strategy and delivery services of Amazon Fresh in the US and UK could prove effective for another first world country such as Australia. While there are no reports yet as to the plans of how AmazonFresh will enter the grocery market, Aussies are already in anticipation of what the new online grocery store has to offer.