Grocery rebranding welcomes Amazon
Tom Dougherty, CEO – Stealing Share
31 October 2016
Even the grocery stores are being threatened by Amazon
Recently, I wrote in Supermarket News that grocery stores have landed in a trap. It’s a trap of their own making, by having grocery rebranding messages focused on price and fresh food. Everyone uses those same messages and they are just definitions of a grocery store. You have low prices and fresh food.
Now comes news of a new competitor that actually responds quickly to change: Amazon.
The online retail giant announced that it will open 20 brick and mortar grocery stores over the next few years, with the stated goal of swarming the country with up to 2,000 eventually. That’s four times more than Walmart owns now.
Grocery stores such as Kroger, Albertson’s and others have reason to be worried. Walmart owns low price. The local chains own fresh (although all grocery stores should own it). And now Amazon will own new and exclusivity.
Amazon will have true grocery stores, where you push a cart (or a buggy, as we say in the South) and shop aisle by aisle. But it will also have a click and collect drive-up component in which shoppers shop online and pick up at the store.
Now, many groceries offer that, so that part won’t be all that different. Although, it should be noted, that Amazon’s brand gives it greater permission to do it.
Amazon is better at grocery rebranding
No, the real Amazon advantage is that it will know its customers. It already has a handful of Amazon Fresh customers who pay $15 monthly fee. More importantly, it has millions of Amazon Prime customers, meaning that Amazon could make its grocery stores exclusive to those members.
There are two advantages to that approach. One, we humans believe that exclusivity means better quality. The clubs we can’t get into are the ones we want to enter the most. (Or, as Groucho Marx said, he wouldn’t want to be a member of any club that accepted him as a member.)
Secondly, Amazon has more data on its customers than probably just about any company in the country (maybe the world), with the possible exception of Google and Apple. That means Amazon can tailor its stores to its specific customers.
Grocery rebranding has been a wasteland for chains, both regionally and nationally. If there is more than one grocery store in your area (and that’s true for most Americans), you end up buying at the store that’s most convenient on the way home. Or you buy on price (Walmart). Or you have a tiered system in which you buy basic supplies at the cheapest store and produce & meats at a more high-end store, like Fresh Market.
Amazon entering the market, though, tells grocery stores that they better get serious about grocery rebranding or they are going to be looking from the outside at more successful efforts that respond to change.
Too much customer service Tom Dougherty, CEO - Stealing Share 21 June 2018 Too much customer service is a real thing I’ve said this before, but I gotta say it again. Too much customer service drives me bat-shit crazy. Not surprisingly, Best Buy kills me with this....
Dow Jones ousts GE Tom Dougherty, CEO - Stealing Share 20 June 2018 Dow Jones kicks out GE. Now what? In 1896, the stock market adds GE as one of Dow Industrial Average’s first companies. As of June 26th of this year, it will no longer be part of the DJIA. I typically...
Tim Cook is leading the way Tom Dougherty, CEO - Stealing Share 19 June 2018 Apple CEO Tim Cook Tim Cook. Apple Act 2. Like everyone else, I worried about Apple’s succession plan. I was a died-in-the-wool member of the Steve Jobs cult. I was not sure what to make of...