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Hacendado and Mercadona have another reason to worry.
Amazon, the company that virtually invented online commerce has been determined for years to revolutionize the food industry. He wants to become the store of everything and cover food with a specific strategy. Food is a sector that is only partially affected by the crises, because families can hardly reduce their expenses there, even when their income is reduced. This makes it a very big market. For example, in 2016, food spending in Spain exceeded 100,000 million euros in 2016.
To give an example of Amazon's commitment to food, last year, the Whole Foods supermarket chain was purchased. Americans with an offer of their own. In Europe, it is said for some time that they are at the origin of the purchase of a large chain, such as Carrefour or DIA. But for now, and without relevant acquisition, the strategy that they defend to attack the market is to use white markings.
The market in Spain
In Spain, the food market is clearly dominated by Mercadona. It has a quota of 24%, against 8.5% of Carrefour, which is the second. The percentage online of this sector is still low, it is about 1-2%. And Mercadona also dominates with a share of 46% (this data was provided by the director of Mercadona Tech). Anyone who has made a purchase at Mercadona Online will certainly be surprised, because their experience leaves a lot to be desired.
Mercadona is therefore such an important player that, despite a bad online experience, he is also able to dominate this market. Next, we will badyze the results obtained.
Amazon has been promoting the sale of food products in Spain for some time. The first thing he did was to put non-perishable products in his catalog, something relatively simple, but soon after, he started selling fresh products via his Prime Now platform in Madrid, Barcelona and Valencia, with fast deliveries (up to 2h from the order). and become the day of supermarket logistics.
According to the study by The Cocktail, Amazon has an online food quota of 14%. Although this study indicates that Mercadona has 22%, against 46% that we said before. Whatever the figures, the relative data are clear: the leader is Mercadona and the second place is between Amazon and Carrefour. But all for a very small market in the total but growing fast and continue to grow, as seen in the United States
The strategy of Amazon
While Amazon does not buy a supermarket that is present in Spain (as I said, rumors have been reported about Carrefour and Day, although before the stock market crash, the following strategy is clear. one side, you have a catalog of non-perishable products in its "normal" store, with prompt and free delivery for those registered in Amazon Prime.
On the other hand, the Prime Now store is intended for residents of Madrid, Barcelona and Valencia deliveries in less than one hour (with cost) or in two hours (no charge for a minimum order amount) .Here there are fresh products, in fact it is the big fort This and the express deliveries, unlike Mercadona, deliveries are spread over several days or at Carrefour which delivers the next day.
But the Spanish market has its peculiarities. The main thing is that we usually buy white label products, which are cheaper. The main reason is that we are very well used: Mercadona has white marks of very good quality.
That is why Amazon has also launched its white markings. Amazon Basics has always been in the non-food sector, but for a few months in the food business, Happy Belly and Wickedly Prime
We must also be aware of another problem: Amazon has generally hidden white marks. This has been seen over the years, many products sold are actually manufactured by Amazon, but are not advertised as such. Some research has uncovered dozens of hidden white marks from Amazon.
What is the reason for this? There are several candidates, none 100% contrasted because Amazon does not talk about it. The first might be to not upset companies that use their logistics platform because if they discovered that they were selling their own product, they could leave the platform. Another reason could be to set margins: when Amazon discovers that there is a range of products that sells very well, it decides to manufacture it, to put it at a competitive price and to promote it in research. And another less malignant reason is to populate a segment of products: if, for example, you want to sell a lot of bags but few brands are encouraged to place them, Amazon puts its models so that the store seems more abundant and attracts thus customers and other brands. 19659003] Be like it's in the food quality is very important and therefore the recognition of the brand. Then, the hidden brands strategy does not think it will work well in this case, if they do. And for the moment, it seems no: there are only products of known brands and these new white brands.
Mercadona's Strategy
Of course, Mercadona is more transparent than Amazon, at least as far as its white marks are concerned. It has been promoting its brands for years (Hacendado, Bosque Verde, etc.), which are generally of good quality and at adjusted prices. This allowed him to reduce his catalog, to rely heavily on his products and to be effective when he has less variety.
In the online issue, we have already seen how they are leaders despite a very bad and despite a logistics based on their stores (which are numerous, 1627, but they lack flexibility). However, they already have a prototype of a new website, much more modern, being tested in Valencia and with centralized logistics. The experience of the new website is very good, more centered on the grid and the big shopping lists than on the product page (which they vehemently defend); Amazon is more focused on the product page and it's a problem to make powerful purchases with many items, although Prime Now is less charged.
Therefore, the leader does not rest on his laurels and will have many websites. better, with mobile apps. It has the advantage of having well-known products, convenience stores, a good brand without troublesome problems (such as warehouse employee strikes or tax evasion) and a more explicit focus on foods.
A problem for Mercadona?
The launch of Amazon's white brands makes it clear that they want to get into the food market, and Mercadona should be very aware of this. Amazon customers who pay for premium service do not see it as a sunk cost (though it is), but as an investment, and as it removed the e -commerce to other websites by backing it up The shipping costs (although other websites are cheaper, even adding shipping costs) may also be removed from Mercadona. Amazon's problem with food was the prices and the white marks (hidden or not) can be insulting.
The war will be long and difficult, but Mercadona also has its advantages: she has a lot of experience in Spain, good quota, recognition and finally a decent online strategy. For me, the key is that even though his website is very bad and he has no mobile application, he is the leader in Spain, also online. It is therefore not possible to underestimate what people attach to their products compared to other factors.
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