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Amazon Prime: Watching the online competition heat up

Amazon Prime: Watching the online competition heat up

While watching one of my favorite network TV shows the other night, an ad for Amazon Prime came on. I think this signals a significant increase in marketing by the dominant online retailer in the U.S., and that the repercussions for traditional food retailers could be serious. Ultimately, it’s a shot that will be (or at least should be) heard round the retailing world.

The gist of the ad was “You know Amazon Prime means two-day free shipping, but there’s a lot more.” For example:

  • It’s tens of thousands of movies and TV shows streaming and millions of songs
  • The ability to borrow electronic books from the Kindle library
  • Access to Amazon Pantry and low-priced grocery, household and pet care items

It ends with the invitation to “start your 30-day free trial today.”

It’s true that most of us have been preoccupied watching the slow, steady rollout of AmazonFresh, but that’s not where the majority of grocery sales are happening on Amazon. They are happening in Prime and Pantry and the Subscribe & Save Programs, which have been eroding traditional retail sales for years.

I wonder if the advertising push is related to the impending launch of and how it’s going to challenge Amazon?

There are good reasons why online shopping in food and grocery has grown slowly (and may continue to drag for some). But HEADS UP — an uptick in awareness of the value of these “buying memberships” could ultimately drive up the adoption of online options and shift yet more food spending online.

The impact will be felt most by food retailers who have not yet offered a good online shopping option to their customers who desire such an option. Feels like the time to act is now.

What are you doing to spur online sales?

TAGS: Center Store
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