Amazon eyes Seattle with deep promotions

Articles
June 09, 2011

Amazon eyes Seattle with deep promotions

Supermarkets rarely think of promotions on the scale of Amazon. But they can stem the competitive threat in different ways.

Seattle-area supermarkets should study the effects of a powerful ‘free milk for a year’ promotion, which AmazonFresh recently offered to new online delivery customers in this city who ordered $75 or more in merchandise.  

“With AmazonFresh, you can place an order tonight after the kids are asleep and have your favorite groceries – from bananas and milk to flowers and wine – waiting on your doorstep the next morning,” tempted the e-mail campaign first reported by GeekWire.com. 

In February, the service offered a 24-hour promotion of 50% off of grocery orders up to $100 to new Seattle customers, according to another blogger, the freebieaddiction.com.

Just prior to St. Patrick’s Day In March, the service’s one-day offer of $75 off of a grocery order for new Seattle customers was posted on fatwallet.com.

This is a sustained high-value campaign meant to build trial of a convenient way to buy perishable foods – at least it’s convenient once consumers trust in the quality of merchandise selected and delivered. As Amazon aims to penetrate this market (other markets too), the risk to supermarkets is Amazon’s impeccable mastery of consumer data and pricing strategies. Few merchants can rival their expertise at understanding consumer interests, buying patterns, and the interconnectedness of purchases and lifestyles.

The Lempert Report reported on May 20 of the increasing number of online delivery services by food retailers. As appealing as these may be to certain consumers, we feel Amazon knows a great deal about fostering a productive online shopping experience, and is quickly learning to apply these insights to food.  

Once Seattle supermarkets assess the impact of Amazon’s encroachment, they should compete in areas where they can excel – in food quality and presentation, in meal solutions that bring a different type of convenience than home delivery does, in nutritional insights and cooking guidance, and possibly even improving levels of in-store service.

They can warm up the shopping experience a great deal, and use their food mastery to help offset Amazon. Before too much time passes, they must move as close to par in managing data as they can.