It seems that Tesco’s new boss Ken Murphy has not just plucked out of the air his claim that customer experience is more important than marketing, with a new warning that the powerful combination of technology and customer data could enable Amazon to land a major blow to the big four supermarkets.
Tesco is not alone in its CX overhaul; Sainsbury’s, Asda and Morrisons are all ramping up their strategies and delivery capabilities in response to increased demand for online groceries.
However, Amazon is ideally placed to exploit the online grocery sector, according to global ecommerce platform Kooomo, which claims the battle for supremacy will be determined by CX.
As the majority of consumers simply want the most convenient and safest way to do their weekly shop, technology implementation will be a clear decider on who will win.
Kooomo CEO Ciaran Bollard said: “Amazon is very good at enticing people into its ever-expanding ecosystem thanks to its sophisticated analysis of customer data.
“Traditionally high street supermarkets and local grocers have prioritised serving a local community of customers face-to-face over their online store and delivery capabilities. In the reality of a post-Covid world, the only way to secure long term success will be through increased investment in sophisticated ecommerce technologies and integrated supply chain solutions.”
The pandemic has exposed some of the most prevalent ecommerce pain points within the industry but Bollard reckons that Amazon will have all the technological capabilities to prevail. When combined with a huge existing consumer base, this certainly makes it a contender to outperform the big four in the long-term, he insists.
However, it still has some way to go. Although the Amazon Fresh online grocery service was launched in 2016, it has so far failed to make any headway in the sector, despite offering Morrisons products as well as grocery items supplied by Booths and Whole Foods, and brand suppliers such as Pepsi, Danone, Warburtons and Britvic.
This could all change following its decision to offer free deliveries to Prime subscribers, of which they are 15 million in the UK.
Retail analyst Richard Hyman recently said: “If you think about the demographic of Prime, these members are relatively better-off… It’s one thing fighting Amazon off when you have an established business, but fighting them off when you’ve got something completely new in the case of M&S and relatively new in the case of Waitrose flying solo will be more challenging.
“Amazon are very clever at getting the rest of the market to follow their agenda and I think what they will particularly be doing is upping the ante on delivery times.”
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