Wednesday, July 7, 2010

Amazon: Food category managers be Dammed!

Category Managers be Dammed it’s not about legacy metric’s it about the customer! Amazon entrance into UK retail food is a wake up call for US food retailers!

Winston Churchill once stated: “However beautiful the strategy, you should occasionally look at the results”.

With a successful test in retail food delivery in Seattle under its belt, Amazon is now entering Great Britain with food delivery. Amazon is know as a company that does it research first then moves into a new niche. I most cases they are right! Clearly legacy food retailers have been paying attention to legacy industry metric’s not consumers. Thus opportunity Amazon, this is the same phenomena driving the grocerant niche of fresh prepared food to new heights.

With a keen eye on the consumer, US based food retailers must now understand a shift in consumer spending patterns has resulted in new opportunity for other major retailers to enter food retailing. Sears is testing delivery in New York and Target is expanding fresh food in more and more markets. 7 Eleven is now selling fresh prepared food in five US markets and preparing to rollout across the entire country. Walgreens and CVS are also testing fresh food format’s.

Amazon’s web grocery store will offer 22,000 brands and represents a direct threat to the dominance of some of the worlds largest and best known specialist internet supermarkets, Tesco, Asda, Sainsbury's and Ocado. It’s a simple strategy, cherry pick on price and quality of service!

Amazon will next increase fresh prepared food offerings to drive frequency and build loyalty. Ready-to-eat and ready-to-heat fresh prepared food will contribute to the success of Walgreens, Sears, Amazon, 7 Eleven. Someone is going to lose? Where will your brand be?

Winston Churchill once stated: “However beautiful the strategy, you should occasionally look at the results”.

Outside eyes can deliver top line insights and bottom line profits. Invite Foodservice Solutions to provide brand and product positioning assistance or a grocerant program assessment. Since 1991 Foodservice Solutions of Tacoma, WA has been the global leader in the Grocerant niche for more on Steven Johnson BING: Steven Johnson Grocerants

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