If widely-circulated reports are to be believed, Amazon’s successful grocery delivery service, AmazonFresh, is expected to enter the U.K. market soon, and is certain to have an impact on chilled and frozen seafood sales.
Numerous media outlets recently reported that AmazonFresh would start operating in London in September, despite AmazonFresh saying this is not the case. The grocery service is not currently operating in London or “anywhere else in the U.K.,” an Amazon U.K. spokesperson told SeafoodSource. “We’ve not made any announcement on AmazonFresh and we never comment on rumor and speculation,” the spokesperson added.
Still, if the rumors are true, the move will definitely shake up the U.K. grocery market. Online grocery is already a large – and fiercely competitive – market, accounting for EUR 8.9 billion (USD 9.8 billion) in sales for the past year to April 2015, according to the Institute of Grocery and Distribution (IGD).
“Surprisingly, for such a small country, the U.K. is the second largest player in online grocery,” said Richard Watson, market analyst for Seafish. “U.K. shoppers generally dislike grocery shopping, are time poor and see online as significant in terms of convenience, time and fuel saving.”
While the online grocery segment is still small compared to other channels, such as superstores and hypermarkets – which garnered EUR 71.7 billion (USD 79.2 billion) in sales for the past year – it is the fastest growing. Online food and grocery sales soared 116.7 percent from 2010-2015, according to IGD. In addition, the firm expects sales to reach EUR 200.6 billion (USD 221.5 billion) by 2020.
“Online sales are still on a rapid growth curve. A record three out of 10 shoppers said they shopped online for their groceries last month, compared to 22 percent in 2010,” said Joanne Denney-Finch, chief executive of IGD. “Over the next five years, online will remain the fastest-growing grocery sector, although we expect the rate to moderate slightly as retailers refine the model and put more focus on encouraging shoppers into stores.”
Online grocery delivery is led by traditional supermarket chains including Tesco, Waitrose, Sainsbury and Asda, owned by Walmart. Plus, online-only firms such as Ocado, which reported a 15.3 percent increase in gross sales to EUR 252 million (USD 278.3 million) in its most recent quarter, are garnering more market share. But that does not mean there is not room for another major player.
Significantly, 34 percent of online grocery shoppers claimed to have bought a product from Amazon in the last month and 35 percent would consider shopping for fresh items, according to IGD.
However, the big question is when – or if – AmazonFresh enters the country, will U.K. shoppers be open to purchasing seafood via the service, as they do in the United States? Pike Place Market, Santa Monica Seafood and other major suppliers have steadily increased their selection on AmazonFresh since starting with the service a few years ago. For example, Santa Monica, Calif.-based SMS’s offerings on AmazonFresh grew from 15 fresh and prepared SKUs to around 60 SKUs by late 2014.
While U.K. shoppers are amenable to purchasing frozen and packaged/canned seafood online, they are resistant to buying chilled seafood, according to Watson. “U.K. shoppers are quite different than shoppers in other European countries, who are typically more comfortable with handling, purchasing and cooking seafood,” Watson said. “U.K. shoppers see frozen and ambient seafood very differently to chilled seafood. Frozen and ambient are seen as a routine part of stocking up the cupboard or freezer. Chilled seafood, however, is seen as more of a special occasion indulgence or treat, and purchased with a clear meal in mind. As a result, chilled seafood shoppers prefer to see the fish in store before purchase to make a judgment on appearance and quality.”
Frozen online seafood sales should be an easy sell. “The whole process needs to be made as easy and reassuring as possible so that those who have not engaged in fish buying online are encouraged to do so, and existing online seafood shoppers are encouraged to buy more,” said Watson.
In addition, the tide may be changing in terms of the type of seafood shoppers will purchase online. In the past 12 months, 33 percent of shoppers made an online chilled seafood purchase, compared to 79 percent of shoppers who made a supermarket purchase, according to recent research from IGD.
U.K. seafood suppliers and retailers that aim to boost seafood sales online should follow these guidelines:
- Offer guaranteed sell-by dates and assurance of refrigeration en route. “After price, quality is No. 1 when it comes to importance for U.K. shoppers. It's all about value for money. U.K. shoppers are prepared to pay more, but in return expect a top-quality product that will delight them,” Watson said.
- Speaking of price, online retailers must provide good discounts and offers directed at first-time purchasers of the service.
- Have an attractive web site with relevant cooking information for shoppers. “Shoppers stressed the importance of a visually attractive web portal featuring cooked recipe inspiration, rather than pictures of wet fish, along with the need for clear portion size and ‘number of servings’ information,” Watson said.
