These more affluent shoppers value time as well as money and spend more per week on groceries than other shopper segments. Amazon Fresh has a well-defined target customer.Īll the Amazon Fresh stores are located in trade areas with above average median income. Here are six things we see that set Amazon Fresh stores and strategy apart: 1. These store these are not designed to attack the competition they are built to outlast (aka survive) other grocery retailers. Its low break-even sales volume means that it can operate profitably in intensely competitive markets. These Amazon Fresh stores should be able to maintain profitability as margins compress and sales volumes fall – which is a key to survival.Īt first glance, Amazon Fresh looks a lot like a conventional grocery store: It’s not too small and it’s not too big, it carries all the items found in a full-service grocery store, and its meat, seafood, and deli departments offer fresh prepared items, grab-and-go, as well as pizza.īut a closer look reveals that Amazon Fresh is a digitally integrated grocery store, merchandised for today’s customers, that provides a seamless shopping experience. If this works as planned, it’s a store format that other grocers will need to watch. Its new Amazon Fresh store has a value proposition that appeals to today’s shoppers, and it combines the flexibility to meet changing customer needs with lower operating costs. Amazon has worked hard to develop a grocery store that its affluent customers would like to shop.
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