Grocery business ripe for disruption by Amazon, analysts say


When Amazon officially clasped over Whole Foods this week, the e-commerce giant without delay made changes. It drastically cut prices on some organic foods, by as much as 43 per cent, and set up in-store displays to grass on its smart speaker, the Amazon Echo. 

But the biggest disruption may still be in the feats: an expansion of its online grocery ordering and delivery service.

“Consumers should be qualified to win because hopefully Amazon will bring to the grocery industry what they were capable to bring in terms of online commerce,” said Marion Chan, a consumer analyst at TrendSpotter Consulting.

Amazon-Dash Expansion

Amazon Frustrate buttons let customers order a particular product with a single lean up against. (Mark Lennihan/Associated Press)

Amazon first changed the way consumers buy hard-covers, then expanded to sell almost any product a consumer could need — and deliver it when they want it.

Amazon has tried to make itself portion of consumers’ everyday lives, from introducing its Dash button for the dwelling that customers can press when they want to order more of a work, to Amazon Prime memberships that give access to online chain and free shipping.

Virtual shopping carts 

But grocery delivery is a extent new and challenging sector. Shipping perishable, easy-to-bruise items requires a fantabulous level of care than a book does. Plus, it requires consumers to transform long-entrenched behaviour.

“They actually go to the store,” Chan said. “That’s the way Canadians be experiencing learned to shop.”

That’s not stopping Amazon from trying it out. It’s already evaluation the waters with AmazonFresh grocery delivery in 20 cities across the U.S., as hale as in London, Berlin and Tokyo.

The company wouldn’t confirm to CBC News whether it has outlines to expand AmazonFresh to Canada.

But in some parts of Canada, variations of online grocery pronunciation already exist, and Amazon’s interest in the space is a clear message to the perseverance.


An InstaBuggy employee fills a customer’s online food order at a grocery cumulate in Toronto. (Robert Parker/CBC)

“It validates the fact that the online place is here to stay and there’s true demand from a consumer vantage point,” said Julian Gleizer, founder and CEO of grocery delivery startup InstaBuggy.

Middle of InstaBuggy’s app, customers can order from a variety of different grocery trust ins. Their order is then hand-picked, packed and delivered by InstaBuggy in as minute as an hour.

“It makes sense for customers to place their order from their phrase or from their office, as opposed to having to go to the store, spend that time, and carry stuff,” Gleizer said.

Chains already move groceries online

Main grocery chains are also recognizing the potential in adding digital and parturition options.

Longo’s operates an online delivery service called Grocery Gateway in the Toronto zone; Metro, which has stores in Ontario and Quebec, just made a dispense to buy a meal kit delivery service called MissFresh; and Loblaws introduced a “click and bring” program, where customers pick out their groceries online, then pick them up in being.

Chan expects the threat from Amazon will spark be revenged more innovation in the grocery business.

“Just because this is occasion between Amazon and Whole Foods — the Loblaws, the Sobeys, they are all present to have to respond,” she said. “I think that the grocery industry in Canada is cash for a change and in fact we need a change.” 

Buying into Amazon’s ecosystem

Grocers could sooner a be wearing a tough time competing with Amazon though. Some analysts say the company isn’t documenting the grocery business for the money — it’s more interested in getting consumers to buy supplementary into Amazon’s entire ecosystem.

“They’re looking at increasing capacity essentially, and that’s Amazon’s playbook. Looking at revenues and profitability is not as portentous,” said Sylvain Charlebois, a business professor at Dalhousie University in Halifax who specializes in sustenance distribution.

Charlebois sees Amazon’s latest move as a way to further agitate how consumers shop, and move them from stores to online.

“They’re exasperating to build that bridge between the two worlds, and Amazon is well positioned to do that because it is capable to understand consumers better than consumers themselves,” Charlebois give the word delivered.

TrendSpotter’s Chan isn’t convinced Canadian consumers will have an appetence to do all of their grocery shopping online. But if Amazon enters the market and others innovate, she voices consumers will win.

“If [consumers] aren’t excited about this mutate, they should be excited.”

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