Non-Standard Grocery Channels (Amazon & beyond) 2012

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With low consumer confidence and limited household income it is not surprising that some shoppers are looking to for alternative channels for their food and groceries in an attempt to make savings. Although the Big Four supermarkets remain the most popular channels, alternative channels such as Amazon Groceries aim to tempt shoppers away from their usual supermarket choice. The internet has allowed for the emergence of sites offering bulk and discount groceries without the need for physical stores, thus keeping costs low.
Launched in 1995, Amazon is the world’s largest online retailer with 164 million active customers and is also Britain’s highest rated brand. It stocks over 23,000 top grocery lines and allows customers to take advantage of the savings and convenience provided by bulk-buying items. Amazon also provides a marketplace for third party sellers to sell through. This report focuses upon online shoppers’ awareness and usage of Amazon Groceries.
This report will:
-Provide you with a brief background to Amazon.co.uk
-Give a detailed outline of Amazon’s current features and how useful shoppers find these.
-Summarise Amazon’s Grocery proposition, including awareness and usage as well as what shoppers use Amazon Groceries for.
-Consider Amazon Groceries offering at a category level. This includes a category breakdown of penetration as well as what items are actually sold by Amazon rather than third party sellers.
-Look at the uptake and barriers to Subscribe & Save.
-Highlight issues found from first hand tests of Amazon Groceries.
-Outline some of the other non-standard grocery channels propositions available to shoppers.

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Non-Standard Grocery Channels (Amazon & beyond) 2012

  1. 1. August 2012 82 Pages £950Non-Standard Grocery Channels(Amazon & Beyond)SAMPLE EXTRACT Evolution Insights Ltd Prospect House 32 Sovereign Street Leeds LS1 4BJ Tel: 0113 389 1038 http://www.evolution-insights.com www.evolution-insights.com 1
  2. 2. About Evolution InsightsEvolution is a leading research consultancy specialising in shopper motivation and behaviour. We deliver off-the-shelf, tailored and bespokeresearch for manufacturers, retailers and agencies. Our research and analysis helps • Evolution offer a range of products & services for clients develop targeted shopper clients in the field of shopper research:- marketing initiatives designed to • Off-the-shelf research influence shoppers at the point of purchase. – Evolution’s off the shelf research publications deliver affordable insight into shopper motivation and behaviours in UK food, drink and grocery • Insight Plus – Insight Plus offers your business the opportunity to engage in any of our We use a range of research regular shopper research projects in advance of publication, tailoring the methodologies to discover genuine scope to suit your needs insights. Our research incorporates a broad spectrum of robust • Bespoke Consulting qualitative and quantitative research techniques. – As publishers of research, we are able to draw upon a wealth of existing proprietary data for consulting projects As a leading publisher of shopper – helping to better inform and shape research, we are ideally placed to any further research requirements. offer your business actionable shopper insight. Further information is available at our website http://www.evolution- insights.com Visit and sign up for Reflections, our free quarterly newsletter offering analysis and commentary on topical issues www.evolution-insights.com 2
  3. 3. ContentsFigures and graphs 5 Problems with Subscribe & Save 40 Bulk Buying 41Key findings and executive summary 7 Willingness to buy in bulk in store and online 42What this report will do for you 8 Bulk Buying Online 45Research conducted on Amazon.co.uk Grocery 12 Summary 46Non-standard Grocery Channels: Introduction 13 Amazon.co.uk: Category Level Analysis 47Consumer Confidence 14 Introduction 48Income and Attitudes 15 Category Penetration 49Channels 16 Subcategories 50 Subcategories Breakdown 51Amazon.co.uk: Introduction 17 Sold by Amazon 54Amazon.co.uk 18 International, Organic & Speciality Food 56Timeline of major launches 19 Home Care & Cleaning 57Amazon Marketplace 20 Beer, Wine & Spirits 58Fulfilment by Amazon 21 Top 100 59Delivery 22 Summary 61Amazon Lockers 25Pre-ordering and Product Availability Alerts 26 Amazon.co.uk: Test Shops 621-Click 27 Introduction 63Amazon Prime 28 Shop 1 64Amazon Accounts 29 Shop 2 65Shopping via smartphones and tablets 30 Shop 3 66Popularity of Features 31 Summary Table 67 Summary 68Amazon.co.uk: Groceries 32Introduction 33 Other Non-Standard Grocery Channel Propositions 69Awareness and Usage 34 Introduction 70Amazon Shoppers’ Behaviour 36 Shorters Club 71Brands 37 Shorters Club Test Shop 72Subscribe & Save 38 Costco 73Uptake of Subscribe & Save 39 Macro 74 www.evolution-insights.com 3
  4. 4. ContentsApproved Food and Food Bargains 75Viking 76Staples 77Summary 78Methodology 79Glossary 83 www.evolution-insights.com 4
  5. 5. Figures and graphswww.evolution-insights.com 5
  6. 6. Figures and graphsPage Type Title14 Graph Consumer Confidence15 Graph Average UK Household Income Tracker15 Graph Current Food & Grocery Spend Attitudes18 Graph Top 20 Brands first half 2012: UK (Based on Index). YouGov.19 Figure Timeline of major launches23 Figure Delivery opinions29 Graph Amazon Accounts31 Figure Popularity of Features34 Graph Awareness and Usage35 Graph Awareness and Usage (2)36 Figure Amazon Shoppers’ Behaviours37 Figure Brands39 Figure Uptake of Subscribe & Save42 Graph Willingness to buy in bulk in store and online by category43 Graph Willingness to buy in bulk in store and online by category (2)44 Graph Willingness to buy in bulk in store and online by category (3)45 Graph I am likely to buy more items in bulk online than in store due to ease of transportation49 Graph Category Penetration51 Table Subcategory Breakdown52 Table Subcategory Breakdown(2)53 Table Subcategory Breakdown (3)54 Figure Sold by Amazon55 Figure Sold by Amazon by category59 Figure Top 10060 Figure Top 100 (2)64 Figure Shop 165 Figure Shop 266 Figure Shop 367 Table Summary Table72 Figure Shorters Club Test Shop www.evolution-insights.com 6
  7. 7. Key findings and executive summary – What this report will do for youThis report will: Provide you with a brief background to Amazon.co.uk. Give a detailed outline of Amazon’s current features and how useful shoppers find these. Summarise Amazon’s Grocery proposition, includingawareness and usage as well as what shoppers use Amazon Groceries for.Consider Amazon Groceries offering at a category level. This includes a category breakdown of penetration as well as what items are actually sold by Amazon rather than third party sellers. Look at the uptake and barriers to Subscribe & Save. Highlight issues found from first hand tests of Amazon Groceries. Outline some of the other non-standard grocery channels propositions available to shoppers. www.evolution-insights.com 7
  8. 8. Research conducted on Amazon.co.uk GroceryDates are given for when research wasconducted on Amazon.co.uk Grocery as thenumber of items listed on Amazon changesconstantly. As such, our figures are given as asnapshot of Amazon on the date given. Weassume that these are a fair generalrepresentation of Amazon.co.uk Grocery.This also applies for the most popular itemsbought by shoppers on the given dates. Webelieve that what we observed from the site atthese times are examples of average shoppingbehaviour on Amazon.co.uk/grocery. www.evolution-insights.com 8
  9. 9. Amazon.co.uk: Introduction – Timeline of major launches 1998 1999 2000 2001 2002 2003 2004 2007 2008 2009 2010 2011Amazon.co.uk DVD/Video Store Marketplace DVD Rental Health and Beauty Musical launched opened launched Service Store launched Instruments and Electronics and launched DJ Store launched Music Store opened Photo Store Home and Sports and Leisure Office Supplies Amazon App for opened Garden Store Store opened Store opened Android launched opened DIY and Tools Software and Grocery Store Store launched Video Games launched Checkout by Jewellery and Lighting Store Store opened Amazon launched Watches Store opened Toys and Games Kindle Store opened Store opened Clothing Store launched launched Outlet Store All-New Kindle Amazon Prime launched opened launched Print on demand Pet Supplies Store for books launched Shoe and Baby Store launched Handbag Store Amazon Lockers opened opened Amazon launched MP3 Store Windowshop launched Car and for iPad Shoes Store Motorbike Store launched opened opened Kindle available in UK Amazon.co.uk Shopping App for iPhone and iPod touch launched www.evolution-insights.com 9
  10. 10. Amazon.co.uk: Introduction – DeliveryAmazon offers several Evening Delivery – £14.99different delivery options Express Delivery – £8.99 per per delivery. £7.48 per unit delivery. £4.49 per unit forfor items sold specifically for Amazon Prime members. Amazon Prime members.by Amazon. These may Orders before the Evening Orders before the Expressnot apply to third party deadline are guaranteed to deadline guaranteed tosellers on Marketplace, arrive on the same day. arrive by 1pm the following Delivered 18:30-21:30unless they are “Fulfilled day. Offered on almost all weekdays and 14:30-17:30 at deliveries to mainland UKby Amazon”. the weekend. Only available addresses. within certain postcodes. www.evolution-insights.com 10
  11. 11. Amazon.co.uk: Introduction – 1-Click1-Click offers a fast and easy way for shoppers to orderfrom Amazon.co.uk. 1-Click is automatically enabledafter a shopper has placed their first order throughAmazon.co.uk. After this order, a “Buy it now with 1-Click” button will be on the right-hand side of any ProductDetail page for items listed by Amazon and Amazon Prothird party sellers. This will check the order out anddispatch it to the default address, gathered from theprevious order.A 1-Click order can be changed or cancelled within 30minutes of placing it.FREE Super Saver Delivery is not available for 1-Clickorders. www.evolution-insights.com 11
  12. 12. Amazon.co.uk: Introduction – Amazon Accounts ‘What kind of Amazon account do you have?’ 80 16 4 Standard Unsure Prime The majority of Amazon shoppers have a standard account. Just 4% have an Amazon Primeaccount. Shoppers may feel that the charge is too high or that they just won’t use their account enough to take full advantage of the Prime benefits. www.evolution-insights.com 12
  13. 13. Amazon.co.uk: Category Level Analysis – Sold by Amazon 18% 82%Only 18%* of all food and grocery items on Amazon.co.uk Grocery are actually sold by Amazon.This means that shoppers only benefit from Amazon postage deals or Amazon Prime membership on less than one in five of all available food and grocery items. Including those third party food and grocery items which are fulfilled by Amazon, only 20%* of all items listed on Amazon.co.uk Grocery are eligible for FREE Super Saver Delivery. Some shoppers are aware of these differences between sellers, with 36% of Amazon food and grocery shoppers only buying directly from Amazon and avoiding third party sellers. *data gathered on 12.07.12 www.evolution-insights.com 13
  14. 14. Amazon.co.uk: Test Shops – Shop 1Shop One No. of items 23 itemsMissing basic items such as milk and butter. No standard milk just Time 18:02:70UHT milk, evaporated, condensed and milk portions. Specialistbutters available, such as Hazelnut, Ghee and Raw Cashew Butterrather than standard butter. Cost £99.37 Postage £81.62Brand repertoire is limited so alternative brands were chosen for Total £180.99most items. (% Postage +82%)Can only buy certain items in bulk, such as a pack of 8 DolmioMeatball Bolognese Sauce rather than just one.Having to buy from several different sellers resulted in someextreme high delivery prices, for example £9.02 delivery on £1.42bag of German Mamma Lucia Cannelloni Pasta, 250g. www.evolution-insights.com 14
  15. 15. Methodologywww.evolution-insights.com 15
  16. 16. MethodologyEvolution’s methodology • Evolution carried out a preliminary survey of around 100 shoppers to test questions for the main survey. Secondary and Preliminary • Detailed secondary and desk research is desk research quantitative survey conducted to define the topic area, macro drivers and trends, scope and examples within the research topic. • Initial insights gained are used to help further design the main survey. Main quantitative • A main survey is completed by at least 1,000 UK Test Shops adults who are the primary household shopper for survey food & grocery. • Test shops were carried out to gain first hand experience of Amazon.co.uk/grocery • Comprehensive and detailed assessment of all the data received was then used to uncover insights. Insights • Throughout this process, primary research was supported by secondary research drawing on Evolution’s proprietary databases, national statistics, news and industry resources. www.evolution-insights.com 16
  17. 17. Methodology: quantitative research - surveyTopics of questions in quantitative survey Demographic profiling • Detailed shopper insights were gained from a survey of 1,027 primary shoppers. The samples Usefulness of Amazon’s features were fully representative of the UK population. Opinions about deliveries • The survey contained 10 questions relating to topics outlined to the left – in addition to standard Awareness and usage of amazon for non-food and grocery items demographic profiling questions • The questions were designed to Awareness and usage of amazon for food and grocery items give maximum insight into shopper’s motivation and behaviour Barriers to Amazon Groceries • The survey was carried out during the week commencing 6th August Category penetration 2012. Shopping behaviours on Amazon Groceries Awareness and usage of Subscribe & Save www.evolution-insights.com 17
  18. 18. Methodology: Test Shops To see just how practical Amazon Groceries is for food and grocery shopping and to gain primary experience of how it operates testshops were conducted upon the site. Shoppinglists were taken from The Grocer 33, a list of 33 everyday food and grocery items. The priceand quantity of items were recorded along with postage charges for those items sold by third party sellers. Unavailable items were also noted along with the time it took to complete the online grocery. Three separate shops were conducted by an non-online shopper allowing for averages to be calculated. Any otherproblems or comments are also given. All tests were conducted in the week commencing 23.07.12.
  19. 19. Contact us Evolution Insights Ltd Prospect House 32 Sovereign Street Leeds LS1 4BJ Telephone: 0113 336 6000 e-mail: insights@evolution-insights.com Web: http://www.evolution-insights.com Company No. 07006001 Country of Incorporation: United Kingdom © Evolution Insights Ltd. All rights reserved 19

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