By Viv Craske, E-commerce Consultant at Grace & Co.
And why hasn’t it used the UK as a test market?
2014: Amazon was a leader in the space, with Prime Now offering same-day grocery delivery.
2016: Morrisons and Amazon created a wholesale partnership deal with Morrisons, supplying fresh and frozen goods to Amazon customers. Rumours had been swirling that Amazon planned to buy a UK grocer.
2020: The Competition and Markets Authority (CMA) cleared Amazon’s 16% investment stake in Deliveroo
2021: Amazon said it planned 260 grocery stores in the UK (likely powered by Just Walk Out tech)
Each and every of these moves individually laid the groundwork to make it a no-brainer for Amazon to make same-day grocery delivery a cornerstone of its offering. But it didn’t happen.
WHY?
If anyone would make rapid grocery delivery work it would be Amazon + Deliveroo + a network of grocery stores.
(Meanwhile, Deliveroo has done an amazing job of serving a large minority of baskets for grocery shops).
But perhaps 2025 is the time when everything will change. With rumours of Deliveroo founder William S. Shu stepping down and Carlo Mocci (Deliveroo Chief Business Officer) looking like a strong internal candidate for the CEO role if that did happen, Carlo brings the perfect experience to focus on a delivery partnership between Amazon and Deliveroo. Carlo was previously at Amazon, where from 2018-2020, he led Amazon Fresh and Prime Now.
Here’s my thoughts on how Amazon & Deliveroo could make this happen:
- Amazon buys a majority stake in Deliveroo, protecting its position against Delivery Hero.
- Amazon extends the Morrisons partnerships through to Whole Foods and Amazon Fresh stores across a wider range.
- Amazon brings Deliveroo Hop micro fulfilment stores inside Whole Foods Stores, Amazon Fresh stores and some Morrisons Daily stores.
- Deliveroo focuses on an improved grocery ordering experience in its app, and Amazon pushes orders to this app. Amazon customer experience has never been good for grocery shops.
- Deliveroo focuses on larger basket sizes. I’ve been suggesting this since 2015 that we need to be able to do large online grocery shops in less than 10 minutes, and today the technology is easier than ever to achieve it for those with the vision to break out of the tired ‘taxonomy and search’ e-com CX. Imagine swiping left and right (like Tinder) through your past purchases, then AI offering to group purchases into suggested meals, followed by some smart product and meal combo suggestions. The last items could be found through Natural Language Voice Search and Taxonomy.
- Add on items from the Amazon Basics range (e.g. batteries, charging cables) could be offered to further increase basket size and profitability.
This could be a hugely exciting opportunity.
