© Aurelijus Valeiša/Flickr
BY ANDREW SHAPIRO
CLIENT PARTNER, CIRRUS
So, Amazon has started offering chilled and frozen groceries in the UK. No surprise there. The company has a reputation for ambition and innovation and started rolling this service out in the USA a couple of years ago.
Will this have an impact on the wider UK grocery sector? Almost certainly. The big supermarket multiples are already under pressure from discounters Aldi and Lidl. And Amazon, with its reputation for speed and operational efficiency, is well placed to expand into the grocery delivery market and challenge the big players.
Amazon came in for a lot of criticism recently following a New York Times exposé alleging poor people management practices, which CEO Jeff Bezos has said he is keen to address. While this may have damaged Amazon’s reputation somewhat, the fact remains that it is still one of the world’s most admired companies with a reputation for slick customer service. Expanding into grocery delivery is yet another way to increase frequent customer interaction and build all-important loyalty. Customers already trust Amazon to deliver, and fast. The brand has credibility. It is considered reliable and instils confidence – extremely valuable attributes when it comes to entering new markets.
It’s hard to remember the time when Amazon was just an online bookstore. Under Bezos’ leadership, it has become the world’s best known digital retailer. And who’d have predicted that Amazon would ever move into creating its own original programming or end up signing Jeremy Clarkson and the Top Gear team? Not me.
This is a great example of just why Amazon is so successful. The business is agile. It responds swiftly to changing market conditions and opportunities in an unpredictable world. It encourages collaboration and innovation to make things happen. It has a modern infrastructure and state-of-the-art warehousing. This enables it to focus very firmly on giving customers what they want, when they want it. The issue that many of the big multiples have is that they’re still a bit too hierarchical and bureaucratic. Often they are saddled with huge property portfolios. It can be difficult to respond to customers quickly, because there are still too many hoops to jump through. Speed demands greater simplicity.
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