Founded by Jeff Bezos in 1995 and originally selling only books, Amazon has been on quite a journey over the last 21 years to become the global retail giant that it is today.
In its primary market of North America, Amazon has many ground-breaking, innovative services and shopping solutions - such as testing delivery by drone via Prime Air and in-home reordering with its Dash buttons - and it continues to expand these services in the UK too.
- Prime Now: smartphone shopping app offering ultra-fast delivery to Prime members. It’s available to more than 30% of the UK population and consists of 15,000+ products including fresh, ambient and frozen
- Amazon Restaurants: one-hour restaurant delivery service for Amazon Prime members in London. Includes restaurants such as Strada, Pizza Express and Tossed
- Amazon Dash: a branded, internet-connected button that links to the user’s Amazon account, providing one-press reordering. Dash brand examples include Ariel, Andrex and Kleenex
- Amazon FLEX: a delivery service currently operating in US cities being trialled in Birmingham, UK. Through Amazon FLEX anyone with a car and valid driving licence can deliver goods to Prime Now members in exchange for an hourly wage
- Amazon Pantry: an online ‘box filling’ scheme. Prime members can fill a virtual box full of items up to 20kg and have them delivered for as little as 99p
- Subscribe & Save: allows customers to receive regular, discounted deliveries of selected low price household goods
- Amazon Basics: own-brand clothing and electronic accessories available exclusively to Prime members. In the US, products also include perishables like coffee, tea and spices under brand names like Wickedly Prime and Happy Belly
- Amazon Echo: a voice-activated digital assistant launched in the UK and German in September 2016 (2015 in the US). It can control smart home devices, answer questions, play music, build shopping lists, order goods and provide other intelligence like weather and traffic information through software called ‘Alexa’
- Amazon Prime Air: delivery of small packages via drone. The UK government has provided Amazon with permission to advance drone deliveries in the UK
- Anticipatory delivery: a shipping system that predicts what shoppers are going to buy before they buy it. A patent was filed in August 2012 and granted in December 2013 but Amazon have not yet announced any plans to proceed with developments
Launched in June 2016, AmazonFresh UK delivers groceries and everyday essentials to a select number of postcodes in the London region.
The service costs £6.99 a month on top of a £79 annual Amazon Prime membership, and offers one-hour delivery slots from 7am to 11pm, seven days a week.
Since June, postcode coverage has more than doubled for the service, and it’s likely that it will eventually launch in other densely populated areas – a move which could then impact existing players.
UK shoppers want more
As more Amazon innovations become available in the UK, speculation on how it will affect the UK market has been rife – and was particularly prominent during the launch of AmazonFresh in June.
Indeed, the appetite amongst shoppers is there: three-in-ten online shoppers say they are already subscribed to an Amazon subscription service, while more UK shoppers told us that they would consider buying fresh food from Amazon in 2016 than in any years previous.
% of online shoppers who say they are subscribed to an Amazon subscription service
% of Amazon grocery shoppers who say they would consider buying fresh food on Amazon
As a disruptor, Amazon will no doubt help the online grocery market innovate, forcing others to keep pace.
Tesco and Sainsbury’s have already introduced same-day click and collect, while Starship Technologies trialled self-driving robots in London earlier this year, and we wouldn’t be surprised if similar Amazon-inspired developments follow.
For suppliers, engaging with Amazon now - and being flexible and agile in their business approach to help Amazon meet the needs of its shoppers as it grows - will be key.
In these short videos, Amazon Director of Consumables Patrick Pondaven explains what the company expects from its vendors.
Patrick is one of the speakers at the IGD Amazon Vendor Leadership day on 8 November 2016.
Amazon wants flexibility from its vendors
Amazon wants its vendors to think long-term
Amazon wants its vendors to see them as a brand-builder