Amazon would be likely to attract a sizeable percentage of shoppers, should it decide to enter the UK grocery sector in a significant fashion, a new study by behavioural science experts Decision Technology (Dectech) has found.
The group found that, controlling for other factors such as price, 13% of customers in the grocery market would choose Amazon – putting the online player ahead of Sainsbury’s (10%), but behind Morrisons (16%), Tesco (16%) and Asda (17%).
Earlier today, Sainsbury's posted a 1.1% decline in like-for-like sales in the third quarter of its financial year.
According to the research, Amazon would likely establish a mid-table position in the UK market, due to the high customer trust levels and brand expertise associated with the business.
'Competitors would be well advised to stay wary of Amazon in the grocery market despite these findings,' Dectech said. 'Morrisons – already a brand partner of the online giant – is found to do well on the factors most influential in driving purchases in the grocery market. If Amazon pursued a similar strategy to the one it took with Whole Foods and acquired Morrisons, it could pose a major threat.'
Potential For Disruption
“Our extensive, two-pronged research into the power of Amazon’s brand and its potential for disruption confirms that for the most part Amazon is as big a threat as people fear," commented Henry Stott, director of Decision Technology.
"If Amazon were to turbocharge its entrance into the grocery market, we could see significant disruption. An increasingly digitised shopping experience in the future could play into Amazon’s hands and give it an acute advantage in grabbing market share."
“Yet Amazon won’t kill off competition in every sector. The e-commerce giant fares less well in offline markets, where customers often attach an emotional element to their experiences. We found that Amazon’s brand has its limits."
© 2019 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine
