What will Amazon’s revolutionary new Australian grocery store look like?

SUPERMARKET shopping is about to be transformed forever. Here’s a sneak peak at Amazon’s plan to shake up Australia’s $90 billion grocery industry.

Supermarket shopping is about to be transformed forever. Picture: LIONEL BONAVENTURE

GROCERY shopping is set to undergo a massive transformation, with Amazon pushing ahead with plans to enter Australia’s $90 billion grocery industry.

The global retail giant is understood to be just two years away from opening bricks-and-mortar stores that will give the major supermarkets a run for their money.

And while the notoriously secretive company is yet to reveal the details of its grocery plan, a key Amazon Fresh executive has shared his vision for the rollout.

Brittain Ladd, who is advising Amazon on its international expansion of the grocery delivery service it operates in the United States and United Kingdom, wrote a detailed blog post about how the company should tackle the Australian market, which he said was ripe for disruption.

“I believe no company is more capable of re-imagining the grocery industry and grocery retail stores than Amazon,” Mr Ladd said in the blog.

Written while he was still working as a supply chain analyst at Deloitte, the post captured the attention of Amazon’s senior executives, who subsequently offered him a job.

It paints the picture of a completely new grocery shopping experience, integrating physical stores with online ordering in a way never seen before.

A NEW GROCERY SHOPPING EXPERIENCE

Instead of having to navigate the aisles of the sprawling Coles and Woolworths supermarkets that can be frustratingly difficult to navigate, shoppers would be able to order canned goods, cleaning supplies, beauty products and soft drinks by tapping a screen on a virtual wall, kiosk or smartphone app.

The physical store space would be devoted solely to the kinds of goods that shoppers want to be able to inspect and touch — such as eggs, dairy, meat, fruits, vegetables and breads.

While they make up just 20 per cent of a typical supermarket’s stock, these lines account for 80 per cent of sales, Mr Ladd explained.

And consumer mistrust of the idea of ordering these particular items online was what kept them traipsing into stores, despite the rise of online shopping.

“Industry analysts report that a large percentage of consumers won’t order their groceries online as they don’t trust the quality of the 20 per cent of lines I listed being delivered from online retailers,” he wrote, citing research showing that 70 per cent of consumers preferred to shop for groceries in bricks-and-mortar retail stores.

COLES, WOOLIES AND ALDI ‘ROLLED INTO ONE’

Although the store size would be small, at about 1900sq m, “customers would be able to select products from an assortment as large, and probably larger, than the assortment of groceries found in large supermarkets,” he said.

Shoppers would have the option of ordering online and booking a drive-through grocery pick-up, or same day home delivery.

By giving shoppers the ability to buy these items in the traditional way, while offering same day delivery on the rest of their grocery shop, Amazon looks set to shake up the market in a big way.

“Amazon will have the ability to compete as a brick and mortar supermarket as well as a discounter, while leveraging their best-in-class online capabilities,” Mr Ladd wrote.

“In essence, Amazon Fresh is Coles, Woolworths, and Aldi all rolled into one online grocery retail entity.”

POTENTIAL METCASH DEAL

The strategy for entering Australia could include partnering with an existing grocery retailer such as Metcash, or other third parties with established logistics and distribution networks.

“Regardless of the strategy for entering Australia selected by Amazon, Amazon Fresh will afford customers an opportunity to purchase high quality, low cost private label products, similar to products found at Aldi and Lidl, as well as branded label products similar to the products found in supermarkets such as Coles and Woolworths,” Mr Ladd wrote.

This would not be Amazon’s first foray into bricks-and-mortar stores. Long a behemoth in internet book sales, Amazon opened a physical book shop in Seattle last year and plans to expand in the US.

The retailer did not respond to a request for comment.

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