Super e-market
It seems obvious, but it had never occurred to us that Amazon would get into FMCG (fast moving consumer goods). Today, however, amazon.co.uk announced the opening of a beta version of its grocery store.
While, at first glance, this looks like trouble for the big supermarkets, clicking through on a few items reveals many of them are sold in larger quantities. So this is probably as much of an attack on wholesalers like Costco.
"Amazon.co.uk's aim is to be the place where customers can find and discover any product they want to buy online, and with the introduction of this new store there are thousands of household, niche, ethnic and international grocery items, all available at the click of a button," said James Leeson, director of Grocery at Amazon.co.uk.
"With unlimited virtual shelf space, customers can choose from a wide variety of products, all of which benefit from free delivery. We will work tirelessly to increase the selection of grocery items available to be delivered directly to customers' doors."
Some, but not all products qualify for free delivery, but Amazon Prime members (£49 per year) still qualify for unlimited one-day delivery at no extra cost. Amazon is also bigging-up the opportunity to do your shopping on its mobile site, although the grocery tab had yet to appear when we checked on our Motorola Milestone.
UPDATE - 16:00, 7 July 2010:
We just received this comment from Joe Robinson, an analyst at retail market researcher Verdict:
"Amazon's foray into the UK food & grocery has been long mooted and thus is unlikely to be an unexpected surprise among the sector's major players. In addition to short term issues such as lack of website functionality and inflexibility in its delivery options, it faces a monumental challenge to build brand trust and, more importantly, loyalty in a market where such attributes are imperative
"Nonetheless, its announcement comes at a far from ideal time for pureplay rival Ocado, which is on the verge of a IPO, hoping to raise approximately £200m to fund the next stage of its expansion. Indeed, while Ocado currently has a significant competitive advantage over Amazon, owing largely to its innovative and efficient fulfilment operations, customer loyalty and quality credentials, Amazon, with its huge resources, is likely to seek to erode this competitive gap in the long term.
"The long term potential of Amazon's food & grocery offer is likely to be in developing a reputation for bulk and niche purchases and offering a platform for smaller food & grocery suppliers rather than cultivating a significant share of the UK food & grocery market."
