THE WEEK IN RETAIL ISSUE 52

EDITOR’S COMMENT

COULD AMAZON REPLACE THE CO-OP AS THE UK’S SIXTH-BIGGEST GROCER?

TWC Development Director Tom Fender is no stranger to taking an offbeat view of apparently mundane retailing issues and coming up with an eye-catching angle – or headline. After all, in his previous business with Mike Greene – HIM – they made a very healthy living by developing a canny knack of seeing convenience retail from a fresh and challenging perspective, one that made us all look at things we all thought we understood just a little differently.

So his latest prediction in TWC’s first Trends Report that Amazon could become the UK’s sixth largest grocer is very much in character. Leftfield clickbait, but with more than an element of the plausible, the more you think about it. Yes, the logic used to get to that prediction is certainly up for debate, but it’s hardly an impossible scenario. Basically, it runs like this: according to TWC research, around 72% of the UK population has an Amazon account and around 61% of those customers claim to “regularly buy from Amazon”. Fender’s argument has it that, if just 60% of that 61% did one big grocery shop a week with Amazon, it would make Amazon the sixth largest grocer in the UK. Hey presto.

OK, there’s a lot of ifs in there, but the scenario Fender describes is hardly off-the-chart unlikely. Yes, the vast majority of purchases made by those Amazon loyalists will be non-food – but with the mammoth growth we’ve seen in home delivery of food and drink, it’s not inconceivable that Amazon could start converting more of those ‘traditional’ non-food Amazon customers into food buyers too. Particularly if it keeps growing its bricks and mortar Amazon Fresh estate as quickly as it’s been doing; its third UK store in just over a month recently opened.

And, as you’d expect from a data and tech company, Fender also reiterates the importance of data to Amazon, a factor that seems to be entirely missing from most industry observers’ analysis of the potential threat of Amazon Fresh in the UK. For my money, Fender is bang on there. The shopping experience, the range, the pricing – all that conventional retail stuff – is all beside the point when discussing the threat of Amazon. Data is the four letter word we should all be using when discussing Amazon.

Customer data is what makes Amazon such a fearsome opponent.

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