Amazon now operates 19 stores, mostly in and around London, with its latest opening in commuter town, Sevenoaks, in Kent. The retailer has previously expressed an intention to open 260 physical stores by the end of 2025.
Latest TWC Trends figures suggest that total online grocery penetration is plateauing following rapid growth through the pandemic and subsequent lockdowns. The research was conducted in June 2022 and showed that whilst 14% of shoppers claim to have used the online channel more in the last 6 months, a higher proportion (16%) have used it less – and the majority are using it the same amount.
The research also suggests there is little loyalty in online grocery, with only 18% of consumers saying they always use the same retailer and 13% saying they use an online delivery subscription such as Tesco Delivery Saver or Ocado Smart Pass. These schemes offer unlimited delivery slots for a fixed monthly or annual fee, along with additional benefits such as access to coveted Christmas delivery slots and in some cases discounts on certain items or free gifts.
Sarah Coleman, Communications Director at TWC comments:
“Amazon appears to be powering ahead with its bold ambitions for the UK grocery sector. Two recent initiatives come to mind – offering 25% discount to Prime members shopping in its Fresh stores on the run up to Prime Day and price matching Tesco (including Clubcard deals) on online grocery orders, presumably both with the intention of driving trial of its services.”
“The low level of loyalty in the online grocery channel means it’s all to play for and given the current cost-of-living crisis, any play on price is likely to be well received by consumers and may just encourage them to switch their shopping habits.”
The research did however also highlight a not insignificant group of Amazon ‘rejectors’, who actively avoid the retailer. Accounting for 1 in 5 consumers nationally, these ‘rejectors’ are similar in demographic profile to Amazon’s core shoppers – they are younger, more likely to have children in the household and over-index in London. This suggests Amazon has something of ‘marmite’ appeal amongst this core group.
The TWC Trends Summer Edition 2022 series is based on the views and sentiments of over 1,000 consumers across the UK. The research was conducted 14-18 June 2022.
For a free download of the research findings, please visit: https://twcgroup.net/twc-trends-summer-22-part-3-online-and-amazon/