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.
Ford advertising. Find someone new.
Ford Advertising Tom Dougherty, CEO - Stealing Share 23 April 2018 Ford advertising. Find someone new. News that Ford advertising might be leaving advertising giant WPP rocks the advertising world. However, the agency with 49 offices across the world will be allowed...
Sheetz MTO process remains sloooooooow
Sheetz MTO Tom Dougherty, CEO - Stealing Share 19 April 2018 Sheetz MTO process remains sloooooooow I lay it on pretty thick in a post on Sheetz some years ago. For purposes here, I am rescinding a portion of my prior analysis, yet offer up a new critique. You see,...
Who wins the Amazon Best Buy partnership?
Amazon Best Buy Tom Dougherty, CEO - Stealing Share 18 April 2018 Who wins the Amazon Best Buy partnership? The recently announced Amazon Best Buy partnership is not the kind of partnership where Best Buy is opening a store within a store on Amazon. Rather, this is a...