Grocery Segment In Amazon Essay

3477 words - 14 pages

Executive Summary
Amazon has grown from what started out as only an online bookstore, into this multi-diversified catalog that is now one of the world’s largest online retailers. Amazon's inventory today includes a vast array of items such as software, apparel, electronics, toys, mattresses, art, jewelry, and so much more. To expand on the ever growing catalog, the online giant jumped into the grocery market in mid-2007. Nonetheless, Amazon’s expansion into this market has been slow in comparison to its other department expansions and offers delivery to only two areas in the United States, which is a large change from its usual worldwide distribution level. This marketing plan will focus on how Amazon can further develop the grocery concept into smaller cities; refine the features of the grocery sector; and how to promote their grocery & gourmet food area in hopes to bring this part of Amazon up-to-speed with the rest of the multi-billion dollar company.
Amazon's current concept has proven to work again and again, which is to offer an insanely large range of products at combatively good prices with fast, well priced, if not free, shipping, yet they are refining their grocery market. People love to shop on Amazon which is apparent by Amazon's Black Friday’s numbers for 2013, that hit $1.2 billion, (Russell, 2013) and their Cyber Monday dealings rose 39% from the previous year having customers ordering 37 million items in one day! (Stone, 2013) That is approximately 428 items a minute. With this already established winning reputation Amazon should have no problem pushing farther and faster into the grocery market, especially into smaller cities.
Amazon faces many challenges with the grocery sector obviously, but this is not an impossible feat. Buying inventory is something Amazon exceeds at, proven by their 89 warehouses across the United States alone; yet the new concept of having to maintain the temperature of sensitive items like produce, which can be very expensive. To side step this issue, Amazon will build alliances with local farmers, restaurants, national and international distributors. This will give consumers options of being able to shop local and still being able to receive gourmet products unavailable in their market area. The inventory control aspects would displace onto an already successful company in the grocery industry to save Amazon the costs of having to add the refrigeration to all of their warehouses.
Pushing into smaller markets would be started by broadening Amazon's reach and advertising more for Amazon's Grocery sector. This advertising would be done as a united channel and separate channel from Amazon's main website offerings. With this method loyal customers will be informed more of the grocery sector, yet at the same time be alluring to customers only looking for groceries. Some small cities may have the idea that Amazon is too large of a site for them or they would not use it enough. Hence Amazon will need to...

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