BMGT 205: Assignment 1, Amazon Fresh

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For Assignment #1, I want the class to read an article from the August 18th issue of Fast Company:

AMAZONFRESH IS JEFF BEZOS’ LAST MILE QUEST FOR TOTAL RETAIL DOMINATION

 

After reviewing the article, please take some time to answer the following questions.  Please answer them numbered, in the comments section of this blog.

1. Why is Amazon Prime so important to Amazon?  What metrics did they talk about to show this importance?

2. Do you think a Amazon Fresh will be successful?  If so, why?  If not, why?

3. Out of the 4 p’s of marketing discussed in week one, which one do you feel is the most important to Amazon Fresh’s success (Price, Product, Place, or Promotion).  Why?

4. If you were a competitor of Amazon, how would you prepare to compete against Amazon Fresh?  How would you position your experience vs. Amazon (Include which competitor you are, and how you would position against this new competition).

I look forward to a good discussion on this next week.

Chris Lovett

 

 

 

 

 

 

 

 

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11 thoughts on “BMGT 205: Assignment 1, Amazon Fresh”

  1. 1. The fees that are paid per customer. The customer is paying for the service and the speed in which their items they ordered get to them. fast service and efficiency.
    2. The service could be successful if all key points are in place, like availability in all areas.
    3. That is a tough one, I think 2 are vital. the product and place. If the place is geographically appropriate then the product can be at it’s freshest. Fresh and fast is what is desired.
    4. The best way to go up against Amazon would be a partnership in selling your product. There doesn’t seem to be an end to the potential growth of Amazon so in my opinion a partnership is the best avenue to pursue.

  2. 1. Amazon Prime is extremely important to Amazon. It provides a big chunk of amazon’s revenue, and brings it many more customers than it regularly would have. One of the metrics they talked about that really jumped out and me and helped emphasize Prime’s impact is how their member count has doubled (from 5 million to 10 million) in just two years! Amazon prime members also spend almost twice as regular customers on a yearly basis. These, among other benefits, have helped Amazon expand so much so that Bezos said he is willing to lose money on shipping & services in exchange for loyalty.
    2. I feel that amazon Fresh has the potential to be successful! I think that there are a lot of factors to be considered into how successful it will be. For example, I feel like people who are in more metropolitan areas will be more inclined to use the service (like me, for example. I live downtown and it’s a pain the butt to take a bus out to a suburb, get my groceries – which I usually limit what I buy because I have to haul it back on the bus – and then wait for another bus and lug it back downtown) but people who live in more suburban areas with a grocery store right around the block would be less likely to use this service. I think its potential success really all depends on whom it markets to (which I don’t see their marketing skills being a problem since Amazon is pretty close to taking over the world at this point.)
    3. Out of the four Ps I think that Place would be most important to Amazon Fresh’s success. It’s all about where these ‘fresh centers’ are located. Not only in means of being close by to get groceries delivered quickly, but also where are the centers located in relation to those who would most likely use the service? Their main focus seems to be on fastness – getting the product to the person as quickly as possible – so I think that place should definitely be their main focus.
    4. This is a tricky one…But if I were a competitor going up against Amazon I think I would choose Ebay Now’s $5 service that delivers products from local retail stores via brand couriers. I think that I would focus on the fact that “We deliver items to you from local retailers so we are supporting the local stores and people! Not a bunch of items in a huge warehouse that come from all over!” I feel like that might be one thing that put a competitive edge over Amazon because a lot of people like knowing where exactly their products are coming from, and they like knowing that it’s supporting local businesses.

  3. 1. Amazon Prime is projected to be a huge part in Amazon’s business. According to the VP of prime, customers with a prime membership will spend more on average than others, due to the fact that they want to leverage their $79 membership.

    2. I do believe that Amazonfresh will be successful simply because of the type of society that we are turning into. As the author of the article said, we can have whatever we want, whenever we want it, wherever we want it. Not to say that we, as a society, have become lazy, but when a convenience like this is offered, its hard to refuse.

    3. Definitely place. The fact that you can order whatever you want and have it delivered to wherever you are is almost unbelievable. I think Amazonfresh coordinators were most likely thinking of convenience when developing this, and what’s more convenient than having somebody else do your grocery shopping and dropping them off at your place?

    4. As a competitor, it would be tough to match this kind of development. In my opinion, eBay would most likely be Amazons largest competitor. However, competing with Amazonfresh would be tough. I think one solution would be to mimic the service yet find more efficient methods to deliver, lowering the cost to the consumer which might be the difference if one was choosing between online delivery services. Other than that, I can’t really imagine a service that would be a threat to Amazonfresh.

  4. 1. Why is Amazon Prime so important to Amazon? What metrics did they talk about to show this importance?

    Amazon Prime is the first way to capture Amazons users and turn them into a growing community. This is the framework for the inner circle of the consumer retail giant, and a great way to build brand loyalty. Proof of concept needs to look no further then the “Members’ purchases and membership fees make up more than a third of Amazon’s U.S. profit.” quote. Quick math (estimating that 70% of prime members are American) brings us to 8.5 Billion in sales. Not so shabby.

    2. Do you think a Amazon Fresh will be successful? If so, why? If not, why?
    I think the roll out of Fresh will be successful, provided it jumps some difficult hurdles. The most important of such will be delivering the “fresh” goods at a standard that all customers will agree upon. When I think of the times I head down an isle at the market, I search for the juiciest appearing apple I can find. While all of the apples in the bin are certified as good for sale, some just appear to look better than others. It will be amazons task to deliver consistent “best of breed” foods to the customer. On the plus side, using food as a vehicle to increase daily sales is pure genius. Just like in the example, the reporter added a movie onto the sale just because, almost as if he was in the checkout line in the grocery store and picked up a pack of gum.

    3. Out of the 4 p’s of marketing discussed in week one, which one do you feel is the most important to Amazon Fresh’s success (Price, Product, Place, or Promotion). Why?

    For me its all about the product in this one. Just like I mentioned in the answer above, the success of fresh will rely upon the ability to convince customers that the juicy apple they see on their screen will match what appears at their doors.

    4. If you were a competitor of Amazon, how would you prepare to compete against Amazon Fresh? How would you position your experience vs. Amazon (Include which competitor you are, and how you would position against this new competition).

    Well if I was any brick and mortar store say such as Whole Foods, I would continue to offer premium products to my customers, to diversity myself away from everything and anything just to be cheap. If you are going to maintain that customers are more willing to do the shopping in person, then you can make a case that they are willing to pay a fraction extra for quality. With a continuing effort towards a social and mobile experience to connect with my customers, I feel I could withstand a loss of market share from Amazon Fresh.

  5. 1. Amazon prime is important to Amazon because it boosted their customers/ memberships, which surpassed creator’s expectations within the first 3 months. Which were due to their prices and free speedy delivery.

    2. I believe Amazon fresh will be successful because the sad truth is that people are always looking for the easy way out. They prefer the connvience of not having to run to the store and do groceries. Instead go to the computer order and it will be there the same day or tomorrow. connvience sells.

    3.I would believe Product would be most important because if the product is undesirable the price and place will not matter. An no matter how much promotion they do people will not purchase unwanted products. A good product will promote its self.

    4.If I were a competitor of Amazon preparing to compete against Amazon Fresh I would begin by comparing prices and speedy delivery; once I figured how to do that I would promote the products, prices, and delivery to remind valued customers and future customers. Reason being that some people may not know the variety of things we sell. This promotion would secure customers because people usually stick with what they know unless unsatisfied.

  6. 1. Amazon prime is important for Amazon because it is apart of their 3 phase pillar in revolutionizing customer experience with online purchases. This sets the bar and makes consumers expect a certain experience that will leave them loyal to Amazon when they can’t experience this anywhere else. It builds loyalty which will therefore create many more transactions. Some metrics that they discussed is; the jump from 5 million members to 10 million within two years, and also the addictive nature Prime causes, making the average Prime consumer spend double what the regular Amazon user spends annually.

    2. Yes, I believe Amazon Fresh will be successful. I believe so because it is convenient to the average consumer. It warrants a lifestyle of consumerism to people who work a lot or are just really busy. It also is set to provide a future framework of delivery that will eventually lead up to same day delivery. This is a huge process for any company given profit-loss consideration. Jeff Bezos nonetheless seems intelligent enough to slowly manifest this shopping feature into a big enough delivery system that in turn will serve as a map for same day delivery, creating loyal happy customers.

    3. Place is the most important factor of marketing in Amazon Fresh’s launch, because it allows Amazon to market delivery anywhere and anytime. This appeals to anyone because as humans we all have busy schedules. So to be able to continue on with your daily schedule and have services/items delivered to you based on your convenience is essential in the next steps of evolving consumerism. Jeff Bezos is brilliant in developing ways that not only keep customers loyal and wanting to spend money with Amazon, but also cutting out any middle men in the process by becoming the delivery man.

    4. As a competitor vs Amazon (Ebay), I would first try and look at other companies to work in synergy with. Amazon is so successful because every corner they are placed in front of they do a complete 180 and turn the situation around. For example: tax issues, Amazon works with states to benefit both the company and the state, infuriating the competition. Next I would compete through delivery options and offering guaranteed lowest pricing on the market. A consistent delivery option would be essential. For example, Amazon uses cabinets in 7-11 to store items that need picked up. Well I would do that only to other 24/7 open businesses and strategically plan it so it is convenient and close to the general population.

  7. 1. Amazon Prime is important to Amazon, not just because it makes them money, but because it creates loyalty. Spending $79 per year on a membership must mean that the customers feel that it is worth it. In my opinion, if you spend over $79 per year in shipping costs through Amazon, it is totally worth it. In the article, it says that Amazon Prime customers spend almost double on the website than non-members do. The number of memberships has doubled in the past two years alone. The customers get what they want at a faster speed and cheaper price and Amazon profits from it.

    2. I think Amazon Fresh will be successful because of its speed and convenience. People in today’s world like to exert the least amount of energy possible, especially when it comes to shopping. For people to order groceries and have them delivered without even getting out of bed, I think that it will be a very popular choice. Also, I think that this would be very popular with moms. Grocery shopping with kids is never an easy task. Why do it when Amazon can do it for you?

    3. I think that place is the most important P in terms of Amazon Fresh’s success. The convenience of ordering from the website anywhere and having it delivered to wherever you are in a short amount of time is mind-blowing. I believe that people will really find this interesting and helpful.

    4. If I were a small grocery store in competition with amazon fresh, I would make sure prices are low and introduce a feature similar to it. For example, I would make it possible for people to call ahead or order online so that they would simply have to walk in and pick up their things. In some cases, it might be quicker than waiting for a delivery man to come.

  8. 1. Amazon Prime is really important to Amazon because it is made up of all the best customers of Amazon, that are the most loyal, and willing to buy way more than non-members. They make about a third of their yearly revenue from the membership fees they charge, as well as the fact that these members spend more than 1100 dollars a year (more than twice a non-Prime member).

    2. I think Amazon Fresh will be reasonably successful. I think Amazon has enough power to make a delivery service like this successful, but a starting up company trying to do this would probably have trouble finding success. I know that other companies do this already, but I’m not sure how much money they make/how successful they actually are. I think that this kind of service will apply to people in inconvient locations, or those who are unable to get the things that Fresh offers. However, a key demographic I see in this, the elderly, probably won’t be resourceful enough technologically to know that Amazon can do their shopping for them. Personally, I like to pick out produce myself and could never see myself not buying my own groceires, but I understand people would want to. Amazon is a big enough company to make this profitable for them, however.

    3. Place seems to be Amazon’s best quality. They are able to get your product to you more efficiently and quickly than rival competitors. That seems to be Amazon’s real power.

    4. The most obvious competitor in this example and real life probably would be eBay. If I was in charge of eBay, (depending on Fresh’s success) I might be forced into offering a similar service at the risk of becoming irrelevant, or outdated. If I had to offer a similar service, I would probably find a single convenience point that I could have an edge over Amazon on. If that would be in the form of cheaper service, faster service, or more quality products, then I would focus on that. Personally, my biggest concern in this kind of business idea would be the things that I need to make sure look good and are fresh (vegetables, fruits, meats, cheeses). I would focus on making sure that these products had the edge over what Amazon could offer, because I feel that if anyone had a reason to choose one of these two similar services, they would probably pick the one with the freshest and most pure natural products. Because after all, a box of cereal is a box of cereal no matter where you go get it. The same cannot be said about fresh produce.

  9. John R. Brown
    1. Amazon Prime is so important to Amazon because it is “the best bargain in the history of shopping”. It accounts for a one-third of the annual revenue and corners the market on “impulse shopping” because of the inclusion of service fees and the “human nature” aspect, people wanting to get the most bang for their buck. In turn, broadening the horizon of purchases. I would say the metric that stood out the most was that the number of Prime members doubled over the last two years form 5 million to 10 million. Impressive.
    2. I do believe that Amazon Fresh will be successful in urban areas for three main reasons. In the world we live in today consumers want speed, convenience and comfort and are willing to pay for that combination. Amazon Fresh combines the speed and convenience that people in major cities need with the lifestyles(busy, busy,busy) we live in but still want to feel like they have a relationship with the people delivering, as mentioned in the article. Also, what one is paying in gas and time to get it themselves is not all that much less than the cost of delivery.
    3. I feel that Amazon Fresh seemingly has a strong grasp on all of the P’s but I think Place and Product are equal in being most important to the success of Amazon Fresh because the Product purpose is to create value by developing a variety of offerings which is needed in a grocery setting (i.e. milk and meat) and Place because it is basically all about getting the customer what they want and when they want it.
    4. If I were a competitor of Amazon Fresh I would either just simply develop a partnership with them in order to avoid getting “steamrolled” by them or go the eBayNow route in order to be able to promote the “support small businesses” aspect to the local markets.

  10. 1. amazon prime is very important to amazon simply because they make almost double off of their prime customers compared to regular amazon shoppers. i believe that people do this because of price and convenience.
    2.i believe amazon fresh will be successful but only in key locations such as inner-city where people don’t own cars and where grocery stores are not close. it may also be popular with mothers and fathers where its a pain in the butt to take the kids to the store or even get out of the house in some weather.
    3.well i think amazon fresh uses all for of the p’s of marketing but probably most important is the place who wouldn’t want their food shopping done for them.
    4. lets just say i was a competitor such as wal-mart, for the areas in which i had stores where amazon fresh was popular i would either have to drop prices extremely low or maybe offer a service such as amazon fresh but deliver anything same day in those locations because i already have low prices

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