13 June 2016

News that web giant Amazon has started its supermarket-style home delivery service in the UK shouldn’t be a surprise to anyone with a keen interest in online shopping trends. The Amazon Fresh brand has been successfully operating in the US for some time, and its inevitable expansion has been talked about for some time. As with anything in the online retail world, it’s been a case of not if but when Amazon would seek to challenge the establishment.

The term ‘disruption’ might have become overused in tech media circles of late, but its use really just reflects the rapid pace of change in retail, online and commerce in general. Challenger banks have been doing the same in the retail finance market, after all.

But what’s Amazon’s latest venture got to do with the auto retail industry? In basic terms this evolution of online trading goes beyond the current and popular ‘click and collect’ model favoured by bricks and mortar stores keen to remain relevant. Sure, traditional supermarkets are now, mostly, onboard with the whole ‘click and deliver’ experience, however Amazon’s strengths lie in its sheer size, legendary customer focus and consumer familiarity. 

It’s already taught traditional retailers a thing or two about how to operate in a digital world and, let’s not forget, also squeezed a few out thanks to its aggressive approach to pricing. Sound familiar? It should if you view Amazon’s new venture in the same context as the rise of online car retailers and pricing aggregators. 

An increasing number of consumers want ‘immediate gratification’ when shopping, which means cutting out the distractions (physically visiting a store) and expecting prompt delivery of their chosen purchases. Amazon’s ability to do this with books, DVDs and now your weekly food shop – albeit in a small part of London for now – is proof that no retail sector is sacred. If you’re selling cars, you now have to factor in Amazon as a potential threat.

Okay, you can’t yet buy a BMW along with your biscuits, but consumers spoilt by Amazon’s slick operation will increasingly choose to buy more of their big-ticket purchases online. It’s only a small jump from clicking on a replacement washing machine to buying the next family car. Food for thought, wouldn’t you agree?

Iain Dooley

Editor, Agenda

Auto Retail Network

Tags: Amazon Fresh, disruption, online, Retailing