Doing the weekly shop with Amazon Pantry


(Published in The Produktkulturmagazin issue 4 2015)

Recently, Amazon has started offering a new delivery service for household and daily items exclusively for Prime members. The online mail-order company is becoming an increasingly significant competitor for supermarkets. Boxes of supplies can be ordered containing preservable food items, household and beauty products as well as office supplies.

Following the fact that Amazon has become the central point of contact in many product categories, the online mail-order company wants to reel in its Prime customers with a new offer for commodities. Pantry is the name of the recently launched service. In comparison to single items, those ordered via Prime accrue EUR 4.99 p&p which is, however, calculated per box. A pantry box can be filled with up to 20 kg of household goods or up to a volume of 110 litres in total, depending on which of these limits is reached first. Following the example of Amazon Prime Now (delivery within a day, thanks to central locations in inner cities) fresh and frozen or cooled food items could soon follow. 

The company, founded in 1994 in Seattle is daring to enter a complete niche market. To date, only 1.2 percent of this product category has been bought online according to surveys carried out by the market research company GfK. Waiting times and delivery costs are probably the sales stoppers here. The competition even in this segment is rising: Rewe and Tengelmann already offer similar services and the drugstore chain dm has recently opened an online shop of its own. Even DHL is already present in this segment with Allyouneed Fresh. The price level is about the same as in well-stocked supermarkets, however Amazon cannot keep up with discounter prices and their cheap generic brands, which could jack up the shopping price. Amazon could, however, have a decisive strategic advantage: the concern has access to a large database, which depicts customer preferences and shopping habits. In addition to this there is the all-round logistic know-how and the existing market power. This advantage could make it easier for the online giant to position itself as an all-round provider for goods of all types.

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