Amazon Fresh: Attract and Convert Costumers

AmazonFresh

In 2007, Amazon had launched an online grocery store called AmazonFresh in Seattle, Washington. This online store allows customers to purchase groceries online from thousands of grocery items with same day or next day delivery. This decision to create an online grocery store was considered risky because every business that attempted to shift the grocery store online had failed. However, despite criticism and skepticism, AmazonFresh has been a very successful online-grocery store. Their innovative business plan was to promote “Convenience, Delivered” that focuses on convenience and fast delivery to customers who aren’t price sensitive but time-starved. Overall, AmazonFresh executives have been happy with the company’s performance but they are currently facing competitive pressures from online-grocery store start-ups. Therefore, to address that major issue, AmazonFresh needs to continue innovating its business model by attracting, converting and retaining customers to maintain its competitive edge against new startups in its sector.  

ATTRACT

Amazon should focus on attracting potential AmazonFresh customers by promoting the online grocery store on the actual Amazon website’s home page. This can give Amazon an opportunity to introduce the product while sparking a need and desire in Amazon customers to make the shift to online grocery shopping. According to the latest research on the Journal of Retailing, customers' actual grocery store preference for a grocery chain like, Tesco or Waitrose, influenced them to try that store's website, and their comfort level increased when they found a level of choice comparable to the actual store^[1]. But, before doing a high investment on Marketing to attract new people, we suggest using the following available resources to attract potential customers:

-Use Amazon.com’s homepage to build awareness: Amazon Fresh should be on their websites homepage.

-Combine Prime Membership service with AmazonFresh subscription: Make non-prime members aware that Prime members immediately become an AmazonFresh member.

-Make use of the logistic fleet: Promote AmazonFresh with Amazon delivery trucks. This will generate awareness because Amazon delivery trucks deliver often on the road.

-Send Invitations to potential AmazonFresh customers: after new customers have set up an account, they get an incentive for referring AmazonFresh to friends or family. Each party can get a discount after the first purchase has been made ($10 off, 20% discount or free delivery). This strategy has been successful for companies such as Uber or Groupon by helping attracting new customers.

-Offering discount coupons for every purchase on the Amazon website: This strategy will stimulate people to go and check the website often to check if there is anything interesting that catches their attention.

After utilizing the available resources, we propose these following Marketing investments:

-Target cities or markets that have long distances to the off-line store from the residential neighborhoods to attract them to the online channel.

-Use viral marketing: As we saw in class, the TNT spot is a great example of Viral marketing where you have a word of mouth publicity. You encourage people to pass on information about your site to others. If it is original and different, it will spread attraction without lifting a finger.