‘In grocery, the impact of smart homes, smart kitchens, smart appliances is going to be huge. When it comes to IoT in the home, I see the war of the home hubs happening.’
Paul Clarke, Ocado CTO, 201635
As a result, consumers will spend less time buying the essentials in the future, a trend that we will explore in greater detail later in the book, particularly in relation to its impact on the physical space. But for now, it’s important to remember that, in exchange for the ultra-convenience provided by these technologies, purchases are funnelled directly through to Amazon’s retail platform. No other retailer has been so successful at infiltrating the consumer’s home.
After several years in operation, Subscribe & Save was bolstered through the 2010 launch of Amazon Mom (now more aptly named Amazon Family) and the acquisition of Quidsi. Amazon Mom allowed customers at a critical life stage to get discounts on nappies if they signed up for regular monthly deliveries; meanwhile, rival Quidsi was the parent company of Diapers.com, Soap.com and BeautyBar.com. An interesting side note here – Quidsi was co-founded by Marc Lore, who stayed on to work at Amazon for a few years. He then went on to create the online marketplace Jet.com which, as discussed in the last chapter, was acquired by Walmart in 2016. At $3.3 billion, it was the largest ever purchase of a US e-commerce start-up and a clear indication that Walmart saw Amazon as a fundamental threat to its business. This was an acquisition of both competitor and talent; at the time of writing in 2018, Lore remains the CEO of Walmart’s domestic e-commerce operations.
Table 6.1 Amazon’s grocery milestones
|
Year |
Amazon’s Grocery Milestones |
Category |
1999 |
Acquires 35% stake in HomeGrocer.com |
Online grocery |
2000 |
Webvan acquires HomeGrocer |
Online grocery |
2001 |
Webvan files for bankruptcy; site folded into Amazon.com |
Online grocery |
2007 |
Launches AmazonFresh |
Online grocery |
2007 |
Launches Subscribe and Save |
Online grocery |
2011 |
Acquires Quidsi |
Online grocery |
2012 |
Acquires Kiva Robotics |
Online grocery |
2013 |
AmazonFresh expands outside of Seattle |
Online grocery |
2014 |
Launches Dash wand |
Connected home |
2014 |
Launches Prime Pantry |
Online grocery |
2014 |
Launches Prime Now |
Online grocery |
2015 |
Launches Dash buttons |
Connected home |
2015 |
Launches Dash replenishment service |
Connected home |
2015 |
Launches Echo/Alexa for voice-activated shopping |
Connected home |
2015 |
Launches Amazon Restaurants |
Online grocery |
2016 |
AmazonFresh goes international; inks supply deals with Morrisons and Dia |
Online grocery |
2016 |
Launches first private label grocery products |
Online grocery |
2017 |
Launches AmazonFresh Pickup |
Bricks & mortar |
2017 |
Acquires Whole Foods Market |
Bricks & mortar |
2017 |
AmazonFresh is scaled back in nine states |
Online grocery |
2017 |
Launches virtual Dash buttons |
Online grocery |
2017 |
Launches meal kits |
Online grocery |
2018 |
Launches Amazon Go |
Bricks & mortar |
SOURCE Author research; Amazon
Two more significant launches came in 2014: Prime Pantry and Prime Now. Initially catering to the bulky, typically monthly shop, Prime Pantry allowed shoppers to fill a 4-cubic-foot box with up to 45 pounds of non-perishable household goods for a flat $5.99 fee. As shoppers added items to their online shopping basket, they were told what percentage of the box was full. The concept was innovative and relatively low risk – delivering cereal and laundry detergent wasn’t foolproof but it was more economically viable than delivering fresh food. It took Amazon half a decade to expand its AmazonFresh grocery service beyond Seattle; Prime Pantry was rolled out across all 48 contiguous states on the first day.