1. amazon fresh

Source: Amazon

Time is running out before Amazon puts its full might into grocery and becomes an unstoppable force for rivals, a former e-commerce head for the company has warned.

Jon Reily, who was Amazon’s head of e-commerce user experience and design from 2012 to 2015, said grocers should be “on notice” following the tech giant’s newly posted second quarter results.

Revenue rose 20% to $63.4bn following the expansion of one-day Prime delivery in the US, but the move squeezed profits to lower than Wall Street’s earnings estimate.

Net income was up from $2.5bn to $2.6bn, or $5.22 per diluted share, as compared to the expected $5.57.

Last night’s trading update ended a yearlong run of record quarterly Amazon profits and caused shares to drop 2% in after-hours trading.

But it has also been seen as Amazon returning to a pattern of reinvesting profit for long-term growth.

Reily, now VP of global commerce strategy at Publicis Sapient, said Amazon’s continued investment in its fast-delivery Prime service would put mounting pressure on grocers.

“With a predicted 120 million Prime members in the US alone by the end of the year, and 135 million by the end of 2022, Amazon’s dominance over rivals Walmart, Target, Kroger and other grocers in the space may be unstoppable at this point,” he said.

“It’s quickly becoming a question of when, not if, Amazon will put the full force of its power behind dominating the grocery space like it does in the e-commerce space.

“Grocers are on notice, Amazon is coming hard and fast for their customers, and finding ways to meet consumers where they want to be in the digital world is the only path to success.

“This is not the beginning of the end of the battle for grocery, but it is perhaps the end of the beginning of the battle, and time is running out.”

Ometria CEO and founder Ivan Mazour said: “The real question is whether the growth of Amazon will spell the end of the high street. I believe that retailers will survive. Customers crave an exciting and inspiring customer experience, and that can only be provided by independent brands focused around a specific vision.”