Jeff Bezos, the founder of Amazon.com and its CEO, is transitioning to the role of the company’s executive chairman. As the transition continues, and even after its complete, word on the street is that Bezos is going to continue his focus on building the business’ food retailing operations. This focus was hinted upon by Brian Olsavsky, the company’s CFO. Olsavsky recently told investors that Bezos will continue to be involved in “the more important decisions” at Amazon, which includes “going into grocery.”
BFD anticipates that Amazon will work on mainstreaming home delivery to affluent customers. The business has already been laying the foundation for this via its Amazon Fresh stores and Prime Now distribution hubs. Amazon has been using both to serve higher-income market areas.
Further, we believe a food operation focus will result in Amazon expanding its one-stop grocery stores. If the company builds more of its Amazon Go stores, it then has the opportunity to bring all of the company’s retail benefits together. These benefits include assets like:
We also expect an expansion of the company’s Amazon Fresh Prime network. If this is accomplished, then the business is in the position to integrate the network with Amazon.com. The result is a strengthening in Amazon’s total grocery experience.
BFD believes there is one prominent downside to an Amazon focus on food ops. The focus poses a threat to niche and specialty food manufacturers. If Amazon flexes its food muscles by showcasing its own brands online, or brands it has invested in, other brands might become less visible to shoppers. Keep in mind, that as things stand now, Amazon is already perceived as the most preferred food retailer among U.S. consumers.
Also note that, as we discussed above, a continued focus on food will likely mean that Amazon invests more in its brick-and-mortar stores. As this takes place, it’s likely that the company will make its in-store experiences even better for shoppers. Better experiences for Amazon shoppers means that the company will boost its competitive advantage over rival retailers.
Brand Focus Digital helps manufacturers sell their products easier and more efficiently on Amazon and other online retailers - in North America and across the globe. We work tirelessly and diligently with the makers of (and not limited to):
BFD’s talent has decades of experience working at Amazon as well as other online retailers. In partnership, we deliver comprehensive solutions to maximize profits for your brands. Contact us now to get the help that truly makes a difference.
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