There is a clear notion that Amazon is focused on competing against traditional grocery chains
Placer.ai’s VP of Marketing Ethan Chernofsky did an analysis of the launches of Amazon Fresh locations. His insights report that there is a clear notion that the brand is focused on competing against traditional grocery chains. He looked at the five Amazon Fresh locations in California where Ralphs is the number one competitor: with an average cross-shopping rate of 75.3% among those customers for the period from January 1st, 2021 through February 25th. Trader Joe’s was the clear number two, followed by Vons, Whole Foods, and Sprouts.
He goes on to say that when considering the contextual performance of the few locations that have been around relatively longer, a similar pattern emerges around them. No surprise to discover that the new locations drove an initial surge of visits that puts them far above competitors – that is temporary and before the visit trends level out and the locations become part of the wider grocery mix. While they are not the top performers in either of these areas, they are still showing strong numbers that are on par with other top-tier California supermarket chains, he shows. Amazon Fresh’s positioning and Chernofsy’s analysis clearly reinforces what we have said since Amazon Fresh was announced – the company is going after mainstream shoppers and mainstream competitors. They want to be the chain of choice for a majority of Americans who certainly do want to have more fresh, more convenience and a smattering of better health & wellness. The shopper on training wheels if you will, before they head to the Whole Foods or other stores, to take a more serious look at what they buy and consume.
Amazon, especially with Bezos now focused on grocery himself want to take on the Kroger’s, Albertsons and H-E-Bs of the world. With that pocketful of cash, it is a must watch to see just how they expand – I believe that the acquisition of a Fairway in New York is just the beginning. It’s a lot faster to buy stores, independents and small chains, than it is to build them.