Marketing Strategy Of Amazon

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In 2015, the U.S. grocery market was valued at $800 billion dollars according to Bloomberg (Soper). It’s no secret that companies are trying to break into this market. Amazon, known for online retailing, has entered the competitive business. Coined as AmazonFresh, the subsidiary looks to boost Amazon’s revenues by delivering groceries straight to households. Currently, AmazonFresh captures 22% of online grocery sales compared to Wal-Mart To-Go’s 13%. First tested in Seattle, AmazonFresh continues to edge its way into the grocery business with a growing number of subscriptions and locations.
The driving force of AmazonFresh is its primary target market: online shoppers. Amazon’s current strategy is to transition its Prime subscribers to also start using its Fresh service. This market segment already buys electronics and other items online. Amazon sees this as an opportunity for online customers to now fit groceries into their purchase selection. By promoting the motto “less shopping, more living”, AmazonFresh is convincing this target market to take the plunge into ordering groceries online (Perez). The reward: valuable time saved from physically going to a grocery store.
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Firstly, online shoppers are already accustomed to buying items through the internet. Secondly, the target market is likely to increase as consumers get familiarized with online services. According to comScore’s State of Retail report, “78% of the U.S. population has bought at least one item from an online store” (Fulgoni). As a growing market segment, the firm has chosen the right target market. In addition to this, AmazonFresh aligns itself to the needs of this market segment. In the UPS Pulse of the Online Shopper study, consumers would add more to their basket for shorter delivery times (UPS). AmazonFresh specializes in fast service as groceries are delivered the next day after a purchase is
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