Start of Amazon Fresh in Germany – A New Category in Which Manufacturers and Distributors Are Yet to Claim Their Market Shares

After a long wait and much speculation on the actual start date, Amazon has now launched its food delivery service – Amazon Fresh – in Germany. Initially, the new service will only be available for Prime customers in certain areas of Berlin and Potsdam. You can find out whether your address is eligible by conducting a postcode search on www.amazon.de/fresh.

Figure 1: Amazon Fresh postcode search

Provided they have a Prime membership, residents of pilot areas can have fresh groceries delivered by Amazon (or its partner DHL). Currently, customers can choose from a selection of approx. 85,000 products. According to information provided by the online retailers, around 100 of these come from small local businesses. Based on the number of available products alone, Amazon is already playing in the leagues of larger supermarkets stocking 60,000 – 70,000 products.

Customers who place an order by midday can receive it by 4pm on the same day. Customers who place an order by 11pm receive their delivery at their desired time (within a 2-hour slot) on the following day – slots are available all day from Monday to Saturday. Delivery fees apply only if the value of the shopping cart falls under 40 EUR. In In the future, this service will cost Prime customers 9.99 EUR per month.

However, the launch of Amazon Fresh is not only relevant for end consumers looking to have their weekly shop delivered to their house at their convenience: in this new category, market shares are yet to be distributed amongst manufacturers and distributors. Anyone seeking to compete successfully must ensure the rapid listing of a suitable assortment of products with high-quality content (photos, videos, texts with helpful descriptions, etc.). As with other product categories, customers tend to make a decision on the product details page. Since, in contrast to brick-and-mortar retail outlets, customers lack the opportunity to consult a knowledgeable salesperson, the presentation of products – as well as price and availability – is the driver for a purchase or for the abandonment of the purchase process. As such, it is recommended that manufacturers and distributors seeking to succeed in the food category develop a clear marketplace strategy and implement it in a systematic fashion. As seen in Figure 2, the three models – “vendor”, “marketplace” and “marketplace + Fulfillment by Amazon (FBA)” – offer providers three different options for doing this. Which is best in each individual case must be determined within the framework of a marketplace strategy.

Figure 2: Overview of main providers and consumers in the Amazon ecosystem

In any case, as of now, manufacturers, distributors and end consumers in the pilot cities of Berlin and Potsdam do not have to wait any longer. Amazon has not yet released any information as to when the Amazon Fresh Service will be available in other cities.