Fast and fabulous: check out the biggest untapped opportunity for online grocery retailers

The biggest opportunity in grocery e-commerce lies in building a full cart in five to ten minutes.

That’s the view of Viv Craske, Founder of Geeky Foody, a consultancy working with FoodTech and retail tech startups at seed, Series A and B stages.

In a LinkedIn post, he says: “Shopping on a retailer such as Tesco, Carrefour, Walmart for a full shop takes 45 mins. It is painfully slow.”

“This is why (pre-pandemic) grocery e-commerce penetration in the UK was at 7-10% and e-commerce penetration in other sectors such as fashion, electrical, beauty was 20-50%.”

He adds: “Choosing 50-80 products from a selection of 50,000 using menu taxonomies and search is slow and frustrating. Then, quick commerce apps appeared and made shopping for two to ten items on an app just about bearable.”

“But large shops still mostly happen on a laptop or desktop which is a better experience than on a mobile (although it's miles from good). If you figure out how to make it easy to shop a full basket on a desktop and a mobile, you will rapidly increase your market share.”

Craske concludes: “This is the most untapped arena for competition as no one is doing this well. I have been saying this since 2014. It's time now…”

Amazon struggles to find a grocery format that resonates with consumers

Amazon yesterday opened an Amazon Fresh checkout-free convenience store in Croydon today.

This can be found at Unit 1, Ruskin Square, Croydon, London, CR0 2WF, and is open from 7:00 am to 11:00 pm, seven days a week.

In addition to a convenience grocery store offering, customers can also pick up items purchased on Amazon.co.uk at an Amazon Hub, and return items without needing to package the product or print a shipping label. 

DALSTON

On Saturday, RTIH exclusively reported that Amazon Fresh had closed its Dalston, London location, less than 18 months after opening it in a blaze of autonomous retail glory.

A spokesperson told us: “Just like other retailers, we regularly review our business and from time to time adjust to ensure we are able to best serve our customers.”

“We remain committed to Amazon Fresh UK physical stores and, in fact, are excited to confirm we will soon open two new Amazon Fresh stores in the Greater London area.”

NB: Croydon is the first of these new locations. No news as of yet on the second one.

Brittain Ladd, a supply chain and retail technology consultant and former Amazon executive, commented: “Retailers often close stores due to a lack of sales and other reasons only to open stores in a different location. Amazon closing one Amazon Fresh store and announcing they’re opening additional ones isn’t a surprise.”

He added: “What it hasn’t been able to do is take market share or establish a large customer base via its Amazon Fresh stores. Unless this can be achieved, it will have to accept running stores with few customers or they’ll have to shut down the locations.”

“Amazon has spent years trying to find a format that resonates with consumers. They’re still looking. I remain convinced that acquiring the Ocado Group and expanding Ocado Zoom is the best strategy for Amazon.”

SLOWING DOWN

Amazon UK opened Its first UK checkout-free store in March 2021, in Ealing, west London.

It then quickly opened another 18, predominantly in the capital, and said lots more (100 or so) were in the pipeline.

Yet in August of last year, we reported that Amazon had slammed on the brakes, due to sales falling short of expectations and fit out costs being multiple times higher than with a standard location.

According to a report by The Sunday Times, the US giant was understood to have walked away from talks on dozens of sites, and stopped its search for more locations.

In a LinkedIn post, Martin Heubel, an Amazon strategy consultant, said: “Not a major surprise amid the current economic climate. It’s expensive to get into retail and even more expensive to remain.”

“With inflation at all time highs, customers are prioritising to save money. Even the most advanced self-checkout technology won’t revert this trend in the short-term. It seems, Amazon has come to realise this, too.”