Amazon has a reputation for disrupting categories. The online retailer is right up there with Apple in terms of brand power and reputation for innovation and vision. So when they enter a new category, I think it`s a safe bet that traditional companies in the category get a little, well, freaked out.
But what does Amazon`s foray into the Canadian grocery market really mean for Canada`s grocery retailers?
First of all, for any of the major Canadian brands thinking of competing in this arena I think it`s a huge concern, but only if you buy the idea that online grocery is going to grow. Now, I`ve seen the future (ie. Japan, where it`s common to order grocery items, including scotch which I took full advantage of on my last trip this May). And if the future is like Japan, then online grocery is a category that is only in still in it`s infancy in Canada. Like mobile and online shopping it will grow. Anyone watching the ecommerce space closely would buy that. But maybe not a brick and mortar retailer.
And therin lies the danger. Amazon`s brand, cutting through the consumer chatter like shark fin, belies a hungry and aggressive animal with a brand that has massive consumer confidence and serious marketing chops. If the category needs to grow, and is ripe for growth, then Amazon will be the company to do it. And in doing so they will emmerge as the top brand.
So is everybody but Amazon screwed in this scenario?
No. Online grocers who focus selling on organic products, particularly parishables such as fresh produce, meat and dairy may not be screwed at all. For them, Amazon may in fact be their saviour.
See, Amazon has the power to grow consumer`s acceptance of online grocery and home delivery. But people who buy organic are looking for more than just a low price and convenience. They want to buy local. They want a brand that is trusted to invest the community.
So as more people stop shunning digital grocery shopping those who want to buy organic will also be looking for the alternatives to Amazon. Right now, there are no strong brands who can fit that need. Enter the local organic delivery service – like SPUD, or Green Earth Organics.
If our local organic home delivery service is smart, they`ll seriously step up their marketing game to keep their brand at the top of the `organic` pile while keeping pace with category growth.
And if they added a few single malts to their product line-up they might even get a few extra customers. Just sayin`.