Amazon Dash, another weapon in Amazon’s armoury to steal market share from the Grocers adding to Prime and Fresh and seemingly creating an impenetrable wall. Can the grocers compete? Should the grocer compete?
Dash on its own, in its current format will not even make a dent. However what it is doing is a remarkable job on brand awareness for Amazon itself who will be the biggest winner and for the brands represented by Dash. (How many photos have you seen in the press of an Ariel Dash button?)
It’s a marketing gimmick. How many people take up the buttons and dot them around their houses is almost irrelevant. What is relevant is that Amazon are shouting loudly that they are serious about grocery and have the coffers to weather any storms that might come their way.
Amazon will not convert supermarket shoppers into Prime customers outright. They may encourage some to add Prime to their shopping channel portfolio and use Fresh but the supermarket will still be their grocery shopping channel.
The more interesting battle field is the online grocery market. At the thinner end of the online grocery market share chart there are retailers with smaller share and slimmer margins that can’t afford to lose any of their slice to Amazon.
As with all things in grocery, we know that fighting head on does nothing except tick a box and weaken the core offer. Matching prices erodes margins, limits customer abandonment temporarily, but does not grow sales. Adding faster and cheaper delivery options adds cost and complexity but does not grow sales.
What does grow sales is a quality offer in an interesting and inspiring environment at a price that the customer deems as good value for money.
It sounds so simple doesn’t it?
So to answer our own question, yes the grocers can compete with Amazon, but on their own terms, not by replicating the Amazon offer (at a higher cost to themselves than Amazon).
Play your own game, do what you are good at, innovate not imitate.