A master business move for Morrisons sees the food retailer strike a deal with Amazon to start selling food products. Morrisons were very late to the online food retail environment, managing to secure only 3% of the market with the other 'big 3' supermarkets (Tesco, Asda & Sainsbury's) securing the lions share of online spending.
From our point of view, with online sales of goods sky rocketing in the last 5 years it was difficult to see how Morrisons were going to compete. It's extremely difficult to play catchup when the competition have established online food ordering and delivery services that have built confidence with customers. The game has now changed...
So why is this a master stroke by Morrisons & Amazon?
Morrisons’ fresh and frozen goods will be retailed through Amazon Pantry which has given Amazon a vital foothold into the UK grocery market. It's a smart move for Morrisons as it allows one of the UK's largest food manufacturers to capitalise on Amazon's mass digital customer base. Amazon has built a trusted reputation online and has become the 'go to' ecommerce website for customers. This is due to the vast range of products available as well as competitive pricing, reliable delivery, comprehensive product reviews from customers, to name a few. Servicing millions of customers, Amazon have truly nailed the online customer shopping experience by:
- Creating complex product intelligence to help customers find similar products based on their search.
- Ultra fast presentation of search results.
- Efficient purchase process and customer account management.
- Clear delivery options which is particularly impressive given their huge, diverse range of products.
- An outbound communications strategy to suggest products customers may like.
The partnership fuses the food retail and manufacturing experience of Morrisons and the innovative digital approach of Amazon which is only going to benefit us, the customer.
This is a positive move not only for the 2 giants but also for the customer. Amazon Prime customers currently experience delivery of products within one hour for £6.99. This service is available in London, Birmingham, Newcastle, Manchester and Liverpool but is expanding fast to other areas of the UK. If a similar model is rolled out for food products it will revolutionise the way customers shop for groceries. The other 3 supermarket giants are fighting back with a 'click and collect' service but this will have little impact if amazon customers can receive their food goods within the hour.
Shares in Morrisons rose almost 6% after the deal was revealed. Analysts said that Amazon would help Morrisons to increase its market share in major cities.
Watch this space, our weekly food shop is about to get a whole lot easier.