To date, the vast majority of online competitors have focused on dry goods and non-food. Now – led by Amazon Fresh – they are launching an assault on fresh food, with Germany as a crucial battlefront.
What’s happening in Germany will soon come to other European markets. And in the United States, it is already a fact of life; with the recent acquisition of upscale brick-and-mortar Whole Foods chain, Amazon is entering the mainstream. By 2020, online retailers’ share of the food market could quadruple or more, to between 4 and 6 percent, putting at least 15 percent of full-range retailers’ brick-and-mortar stores at risk.
However, despite today’s digital environment, consumers still appreciate the advantages of shopping in a real store. Sumptuous cheese and meat counters, freshly picked fruit and vegetables, and the scent of fresh bread are still luring customers to grocers week after week. And as long as customers are satisfied with the quality of a store’s fresh products, they will be difficult to convert to online. Crucially, these happy customers tend to buy not only more fresh but also more ambient and non-food products – up to one-third more.