5/22/2019 Amazon is Flexing Its FMCG Muscle – So How Can Retailers Compete?

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Amazon is Flexing Its

FMCG Muscle – So How
Can Retailers Compete?

Stuart Elmes 30th July 2017

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Amazon Amazon fresh Asda Big4 CPG
FMCG grocery Morrison's online

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online grocery Sainsbury's Tesco UK
Wholefoods

 Change has come to Supermarketland once more

After establishing a beachhead in the UK and US

online grocery landscapes over the past few years
with Amazon Fresh, the online retail giant's recent
purchase of Whole Foods has supermarkets on
How can UK grocery
both sides of the pond running scared
retailers prepare to
defend against the
As the digital world's most recognised online retail
online firepower of
brand - with its huge arsenal of digital marketing
firepower, deep pockets, and patient leadership -
Amazon Fresh?
launches the most legitimate assault yet on the Stuart Elmes
world of traditional grocery retail, big-name
supermarkets will be asking themselves how
they’ll cling on to their market share.   

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Amazon is Flexing
Home Products About

Its FMCG Muscle – News Book a demo

So How Can The Online Grocery
Wars
Retailers Compete? Stuart Elmes

If the world’s reigning Who Will Lose the

Online Grocery
grocery retail Wars?

heavyweights don’t adapt Stuart Elmes

and evolve, the

combination of Amazon
Fresh’s bold move into
the FMCG space and the
Grocery retail firepower ePocalypse Now? The
State of Retail in
of the Whole Foods brand 2018

could well prove Stuart Elmes

disastrous.

Panic Stations!

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5/22/2019 Amazon is Flexing Its FMCG Muscle – So How Can Retailers Compete? - Adimo

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Rolled out in the UK last year, Amazon Fresh has

taken a slow, methodical approach to its move into
the grocery space. Even in the US, Amazon’s
homeland, the company managed to capture less
than a 1% share of the country’s expected $795b
food and drink sales for 2016.

But by gobbling up  Whole Foods, with its

established distribution network and 450+ brick
and mortar locations in the US, Canada and the
UK, Amazon now expects to be a top 5 US grocer
within the next five years. Domination in the UK
and Canada surely won’t be far behind.

What appeared at first to be a slow creep into the

FMCG/CPG grocery market in several major cities
now bears the clear hallmarks of an aggressive
takeover.

Meanwhile, the UK’s “Big Four” (Tesco,

Sainsbury’s, Asda and Morrisons) have so far
shown little inclination to back down, investing
large sums to stake their respective claims in the
online FMCG retail space.

Standing Up To The
Giant

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So where should traditional grocery retailers

focus their marketing efforts to defend their turf
against Amazon’s latest assault? Should they
focus on promoting the benefits of the traditional
in-store shopping experience, or push harder for
market share in the online shopping arena? Can
the Big Four afford the risk of alienating either the
growing online grocery brigade or the traditional
in-store army? Will traditional in-store grocery
shopping ever be cool again?

These are tough questions to answer, particularly

when looking at the current data. 37% of Brits
surveyed by IDG (Institute of Grocery Distribution)
in May 2016 reported having purchased a food or
grocery product from Amazon in the past month,
a 2% increase over May 2015. In that same survey,
42% of respondents stated that
they could potentially be converted to online
grocery shopping.

Those are impressive numbers, indicative of a

significant industry trend which can’t be ignored.
Amazon is focused squarely on the long game
here. Amazon has very deep pockets and can
comfortably dig in for a war of attrition with the
Big Four while establishing itself in the UK’s
grocery sector.

The Big Four, on the other hand, have already been

tightening their belts for the better part of a
decade and can ill afford to take this approach.

Attempting to beat Amazon at its own game is a

big risk to take. Now is the time for forward
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thinking and ingenuity from the Big Four’s

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like Adimo demonstrate that innovative
marketing approaches can shortcut the journey to
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improving loyalty and measurability for brands
and retailers.

But that is only part of a story of where

established grocery retailers have thus far fallen
short. Their focus on lowering prices to gain an
edge neglects the fact that consumers also
view user experience as another crucial aspect of
value perception.  By collaborating directly with
brands,  retailers can source new customers from
entirely new channels, all whilst making their
sign-up and purchase processes simpler with
shortcuts like pre-built online shopping baskets,
meal plans and other simple changes that give the
user far more value. Such approaches could go a
long way toward helping to acquire and retain
customers more effectively, which in the long run
is a far more sustainable approach to retaining
market share. Should established grocery retailers
begin to adopt these practices, they may just be
able to hold their own.

For the world’s reigning grocery retailers, and

indeed traditional retail grocery stores worldwide,
the digital options for changing the way they
market themselves and their services are
plentiful. The time has come to choose a new
marketing path and walk it.

Adimo’s goal is to make marketing useful by Home Products About News Support
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