AMAZON FRESH:

REKINDLING THE ONLINE

GROCERY MARKET
GROUP 10:

KRISHNAKANT S MAHESHWARI(PGP09197)

SHRAY YADAV(PGP09236)

SAI JAGTAP(PGP09190)

SHUBHAM SINGLA(PGP09239)

SHUBHAM DIVYANSHU(PGP09238)

HRANBUNG DARTHANG ANAL(PGP09189)

NEHA SHEENAM(PGP09211)
 2 ABOUT AMAZONFRESH

• AmazonFresh launched in 2007 as an invitation-only beta test on Mercer Island

• A customer could browse over 100,000 grocery items, place selections in a
digital “basket” and have them delivered the same day or the next day
• No online grocer had yet succeeded on a national scale
• In 2012 less than 2 percent of overall U.S. grocery sales were transacted online.
• Groceries represented the largest single retail category, with 2010 revenue of
$600 billion
• Consumers shopped for groceries 2.2 times per week on average
 3 AMAZONFRESH MARKET
POSITION
• Captured 1st position in online grocery retail
• Closest competitor- Walmart
• Offers next-day delivery for 3.90-5.90 euros and a minimum order value of 40 euros
• Acquired Whole Foods a year ago for $13.7 billion
• In 2017, It $2 billion in grocery products online in the US, up 59% year-over-year
(YoY)
 CREATING VALUE FOR CUSTOMERS
4

Redefining costumer experience

• Delivery Efficiency: Flipkart serves on time delivery to over 19,000 Postal codes in
India.
• An App that never lets you down: Flipkart ensure that it’s app is optimized for use
in poor connectivity regions as well.
• Wide range of products and Discount Options
• Flipkart assured : It ensures that costumers do not need to pay delivery charges on
the purchases above Rs.500
• Leader in costumer communication: Breaking communication barriers through
24/7 online connectivity
• Return policy: Depending on the product, Flipkart provides exchange, replace or
refund of it’s products
5 AMAZON MARKETING CHANNEL
STRATEGY
• Contracted local retailers and suppliers of prepared food
Suppliers or
• Amazon had its own warehouse to maintain quality
local retailers control

• Purchased existing distribution center from Safeway

Distribution
• Changes made in layout to facilitate efficient assembling
Centre and packaging

• Delivered through delivery trucks, operating on routes designed

to minimize total distance travelled and maximized the uses of
trucks
Consumers • Delivers in crates or reusable totes and insulated it with
thermocol
 6 CHALLENGES IN ONLINE
GROCERY RETAIL
• Online grocery retail was having a long lead time
• Customers preferred to choose their own produce rather than buying online
• Attracted toward brick and mortar stores appealing display and samples
• Online grocery industry has very small margins nearly about 1 percent due to high COGS,
labour expenses and spoilage
• Needed their own logistics infrastructure to keep food at appropriate temperatures
• Needed sufficient customer density in a given neighborhood to avoid sending out partially-
empty delivery trucks
• Customized delivery truck sat idle for most of the time
• Online grocery also lacked legitimacy and was known as Bermuda triangle of e-commerce
 7 CONSUMER VALUE PROPOSITION

• Wide range product available, nearly 1,00,000

• Lower prices as compared to its competitors with higher product quality
• All totes, paper bags, or cardboard are recyclable or they can be pick up in
next fresh order
• Sleep tight service enables the customer to get doorstep delivery at night
• Shorter lead time – allowing same day or next day delivery system
• Damage or missing goods are eligible to be refunded
• Unsatisfied customers often get refund or added perks to keep them happy
 8 RECOMMENDATION

• AmazonFresh must excel in the logistics and transportation category of the business in
order to generate more profit margin
• AmazonFresh must invest into maintaining the temperature and quality of groceries, like
purchasing trucks that have refrigeration and deliver goods within a certain time frame.
• It should tie-up with brick-mortar stores so that it could distribute perishable items from
there hence minimizing logistics and transportation costs which otherwise require careful
handling and refrigeration
• It should expand its current business model into Los Angeles City
• Should try to provide free delivery to customers so that they can also benefit by ordering
online more frequently thereby ensuring customer retention.
9

Thankyou