Amazon’s past forays into grocery sales have sometimes encountered logistical hangups, but today’s announcement that it’s buying Whole Foods for $13.7 billion showed clearly that the online retailer is dead serious about cornering the grocery e-commerce channel.
Amazon was also a prime subject for the first two speakers in an e-commerce discussion series at the just-concluded BevNET Live Summer 2017 event in New York this week. Keith Anderson, senior vice president of strategy & insights for Profitero, and Arnold Ventura, vice president of business development for Califia Farms, discussed the growing and essential market for e-commerce in the beverage industry and the role Amazon can play in guiding new businesses.
“There’s people today that are creating multi-million dollar businesses just by looking at long-term keywords on Amazon,” Ventura said. “Instead of creating a product and trying to amalgamate a platform to your product, they’re mining the keywords for where people are trying to search.”
Anderson said that more product searches happen on Amazon than on Google, and called the website “one of the most overlooked” influences in consumer decision making. In today’s online market, entrepreneurs need to appear on the first page of a search query, and consumer reviews can play a significant role in favoring one brand over another.
At Califia, Ventura said, the company views e-commerce not as another channel in addition to natural or convenience, but as an entirely different marketplace.
“It’s happening whether or not you’re there and if you don’t participate, others will fill the space,” Anderson told the entrepreneurs in the room.
While Amazon is working to get a stronger share of the online grocery market, other companies have been at the game for decades, and have found ways to innovate and connect directly with consumers through the online platform.
FreshDirect kicked off the e-commerce series on Tuesday with the web company’s senior merchant for dairy and grocery, Marissa Dobbins, and senior vice president for brand partnerships, Michelle Harmon-Madsen. Dobbins and Harmon-Madsen discussed ways e-commerce sites can appeal to consumers and drive up sales through social campaigns and lifestyle marketing, as well as cultivating strong relationships with brands and suppliers to ensure top food quality.
“On the branded side of the business, our customers look to us for brands that they trust,” Dobbins said. “It’s exciting to offer a really unique assortment to a really excited consumer. So what does that mean for brands? Access to excited customers — they’re foodies, they’re solution seekers, they understand what the value is for a model like this. It’s not just about convenience, it’s about the quality of product, it’s about the brand story, it’s about access to food you can’t get at another retailer.”
Samantha Brody, senior sales manager for Peapod, discussed the website’s grocery list feature, which allows users to save their default shopping lists every time they make a purchase. For a brand, getting their product on those default lists can be a valuable driver of sales and consumer loyalty.
Finally, on Wednesday, Walmart-owned Jet.com closed out the retailer profile series with a presentation from Kerrie Lopez, Sr. Manager Category Management – Fresh. The young company, founded in 2014, is adding 400,000 customers a month, hit $1 billion in sales within its first year, and is seeing double-digit repeat purchase rates. In 2016, Jet was acquired by Walmart.
“We are now doing things faster, doing things quicker, and making things all about the customer,” Lopez said.