If you’re a grocery retailer and you haven’t explored selling on Amazon, it could be time to stop fighting for that eye-level shelf space at your local brick and mortar grocery chain, and focus your efforts online via AmazonFresh.
Now more than ever before, grocery retailers (particularly those of niche or local products) have an incredible opportunity to expand their customer base and make a name for themselves outside of limiting farmers markets and grocery stores.
According to eMarketer, this year Amazon’s ecommerce share of food and beverage sales in the U.S. will grow by 40.1% – the largest increase among all categories listed below for 2018:
Although only 23% of Amazon households currently buy their groceries online, that number is expected to jump to 70% within 10 years, according to a recent report by Food Marketing Institute and Nielson.
So, who is leading the online grocery revolution?
Due to their recent purchase of Whole Foods and additional development of Amazon Pantry and AmazonFresh, Amazon is now at the forefront of the online grocery shopping movement.
In the following article, we take a closer look at the benefits (as well as the challenges) of selling groceries online via AmazonFresh.
What is AmazonFresh?
In August 2007, Amazon ran a beta test in a limited service area for their new grocery and delivery service, AmazonFresh.
AmazonFresh delivers groceries to customers’ doors and also provides a pickup service from select retail locations.
Although the number of cities within the service areas is somewhat limited, they are high population locations that are great for offering widespread exposure to a potential Amazon seller and their products.
AmazonFresh: Membership Requirements & Cost
Prime members can get the benefits of AmazonFresh for an additional monthly membership fee of $14.99.
Shoppers can browse perishables, household products, and gourmet specialty items from the dedicated Fresh page.
Today, AmazonFresh offers 500,000 items and specializes in perishables that need extra packaging in order to be delivered and consumed safely.
The delivery packaging is reusable and can be left out for an Amazon driver to pick up at the time of the customers next delivery.
AmazonFresh: Delivery & Pickup
AmazonFresh also offers same day or next day delivery depending on the time the order was placed, and the available delivery times for the area.
The program offers pickup in specific locations including:
- Northern California
- Southern California
- New York
Most recently, the US postal service partnered with AmazonFresh to increase the delivery area by allowing orders to be dropped off at a specified USPS locations within a service area and delivered quietly to the customer’s doorstep before sunrise.
How does AmazonFresh compare?
There are some other alternatives to AmazonFresh and Prime Pantry, and each one offers slightly different products, fee structures, and delivery fees.
More information on the competition:
- Google Express offers comparable products in the grocery and household category and has similar fees to Amazon. Google Express also gives customers the option to select items from specific stores, and in some cases, even get free shipping.
- Instacart has also exploded in popularity recently and has a different fee structure that is based on the order size and time of delivery. They allow customers to order bulk items from stores such as Costco without the need for a Costco membership.
All of these services are great options for various customers and offer a lot of potential exposure for any retailer or seller’s products.
However, there’s a reason Amazon has beat out others online grocery shopping arena. They offer convenience, a massive selection, and fast shipping–and they do those things better than anyone else. Right?
AmazonFresh: Obstacles & Review
Unfortunately, as wonderful as it sounds (in theory) to avoid long lines at the grocery store after work, the program has encountered some negative backlash.
According to Business Insider:
Though the company is known for its stellar customer service and reliable shipping of online shopping orders, customers told Business Insider that its Fresh service could use some work.
Business Insider spoke with more than a dozen AmazonFresh customers who said they had experienced issues with the service in places like Los Angeles, New York, and Washington, DC. These customers complained of poor-quality and even spoiled produce, orders being packed incorrectly or illogically, canceled or late deliveries, and regularly missing items.
Fresh took another hit of bad press in November 2017, when Amazon reportedly ended the service in 9 states nationwide due to problems between the program and the U.S. Postal Service.
But Amazon isn’t throwing in the towel on grocery delivery – yet.
In July 2018, Amazon announced they will be expanding their grocery delivery via Whole Foods (Prime Now) to several new markets in New York and Florida.
While there are obviously some logistics that still need to be sorted out between AmazonFresh & Whole Foods delivery services- the desire for fresh produce at your front door is on the rise.
“We’re not going to make the claim that grocery stores will be obsolete in five years. Because they won’t–there are still 75% of shoppers in the US who buy their groceries in person. But we also can’t afford to be behind the curve.”
– Leanna Kelly, Content Specialist at CPC Strategy wrote last year.
“Consumers are looking for greater convenience, flexibility, and customization for their shopping experience while also being cost sensitive, and all of those needs can potentially be met through ordering online. And right now, Amazon’s doing this better than all other competing platforms.”
How to Apply to Sell on AmazonFresh:
There are plenty of vendors who will qualify for the program, as long as they meet Amazon’s vendor and food safety requirements.
While all applications will be reviewed, due to the high volume of applications Amazon receives, a response may take time.
AmazonFresh Vendor Requirements:
• Products must have a unique UPC for each variation/product
• Products should have e-commerce friendly packaging
• Meat, Seafood, and/or Prepared Food items must be available pre-packaged and by net weight
• All vendors must be prepared to provide product liability insurance
Food Safety Specific Requirements:
• Vendor should have a current GFSI Certification, otherwise an Amazon Food Safety audit must be conducted
• Products made in the USA should be produced in FDA or USDA licensed and approved commercial manufacturing facilities
• Products made outside the USA should be produced in commercial manufacturing facilities that follow FDA or USDA regulations
AmazonFresh currently accepts:
- Prepared Foods
- Dairy, Eggs, & Cheese
- Frozen Foods
- Meat & Seafood
- Snack Foods
- Breads & Bakery
- Breakfast Foods
- Canned & Packaged Goods
- Health & Personal Care
- Meal Kits
- Household Supplies
- Beer, Wine & Spirits
According to Amazon, once an application has been completed and submitted, the AmazonFresh buying team will review it to determine which program and category your product(s) falls within.
You can expect a response to your application once reviewed by Amazon’s team. Providing complete and accurate information in your application will help to expedite the process.
Pro-Tip: If your products are currently available on Amazon, you will need to submit a separate application to become a vendor on AmazonFresh.
As of March 2019, AmazonFresh ASINs (and Prime Pantry) can now be promoted using Sponsored Product, making it easier for shoppers to find your shelf-stable, refrigerated, and frozen products.
Pro-Tip: Amazon Sponsored Products ads are—and will continue to be—one of the most powerful tools for driving discoverability and incremental sales for Amazon sellers.
The launch enables advertisers to create campaigns for all Fresh ASINs, including perishable ASINs, and enables ads for ASINs with a Fresh offer to be shown in the AmazonFresh program experience.
The feature is automatically enabled for new and existing Sponsored Product campaigns. If you have a Sponsored Products campaign running that features an ASIN with multiple offers, the Fresh offer is now eligible for display.
As of now, Sponsored Products is the only ad type available to Fresh ASINs, but an ASIN can be available through the Fresh, Pantry and national retail programs.
15 FAQs: AmazonFresh / Prime Pantry Advertising
Below responses are provided by Amazon:
Q. If I’m advertising an ASIN with multiple offers, how does Amazon determine which offer to feature?
Amazon will determine the best program or placement for your ad (i.e. the Fresh offer will appear in AmazonFresh search results, and the Pantry offer will appear in Pantry search results). All offers are eligible for placement in all product search, with the business rules determining which offer is best to show to the customer.
Q. How do you determine whether to show the national vs. the regional offer?
If there is a national offer, that offer will be shown. If there is no national offer, the regional offer will be shown when the customer is eligible to purchase it.
Q. What if my ASIN is only available locally?
The ad for an ASIN without national availability will only be shown to customers eligible to purchase it.
Q. What happens if my ASIN is out of stock regionally vs. nationally, or vice versa?
The ad will feature the offer that is in stock.
Q. What happens if my ASIN is out of stock entirely?
Your ad will not be shown to customers
Q. Should I add Fresh ASINs to my existing campaigns?
You have the choice of adding Fresh ASINs to your existing campaign or creating new campaigns to advertiser these ASINs. Amazon will determine the best program or placement for your ad.
Q. Where will my Sponsored Product ad featuring a Fresh ASIN appear?
Your Sponsored Product ad featuring a Fresh ASIN can appear anywhere on the website, including the Fresh search and detail page experience, when the keyword you selected for the ad is relevant for the customer query or detail page.
Q. How will customers experience Sponsored Products ads available through these programs?
When searching within Fresh or on Fresh detail pages, customers will only see ads for ASINs within the Fresh program that can purchase. When searching across all products or in other places on Amazon.com, customers will see ASINs available through these programs if they are eligible to purchase the item. When the ASIN is also available through the national retail program then this offer will be featured in the ad.
Q. Will ads for Fresh ASINs appear to customers who are not members of AmazonFresh?
Yes. Your ad will be shown to the broadest audience that can purchase your product. This includes non-members of the Fresh program as long as they are eligible to purchase the advertised product. Non-members have the option to join the program, or in many cases, access a free trial.
Q. Can I set up campaigns with multiple ASINs from different categories?
Yes, you can add any eligible ASIN to a Sponsored Product campaign.
Q. Can I select the program where my ad will be shown on the site?
No. The ad systems will determine whether to show your ad in the Fresh, Pantry or National website experiences, ensuring the best experience for the shopper and the advertiser.
Q. What if I want to reach Fresh shoppers with my Pantry ASINs?
Ads for ASINs offered by the Fresh and Pantry programs will be seen by customers in All Product Search. However, ads shown in the program search and detail pages will be limited to those available through the program.
Q. Will my Sponsored Product ad include the “add to cart” button like in the organic experience?
Yes, your ad will include the add to cart button when it’s shown in the program experience for Fresh and to Fresh members. The add will include a “Try Prime Fresh” button if it is shown to a non-Fresh member in the Fresh program experience.
Q. How will Estimated Total Sales be attributed for a Fresh ASIN?
The estimated total sales will be based on the sales for the ASIN generated from the retail national, Fresh and Pantry offers.
For example, the estimated total sales for customers that clicked on an ad, purchased the product through the Fresh program, and purchased the product through the national program within 14 days, will be the sum of all the purchases.
Attribution is limited to sales within the same marketplace to the same brand as the advertised product, and only to sales by Amazon-sold (1P) ASINs and does not include third-party (3P) sellers. Sponsored Products sales exclude order cancellations and payment failures.
Q. How can I see reporting for my Sponsored Product campaigns featuring Fresh ASINs?
You can view performance metrics in your reporting dashboard. It may take up to 12 hours for sales and traffic data to show up on the campaign dashboard. To see a more detailed view of ASIN performance, refer to the “Advertised product report” available under the “Reporting” tab.
Advertised product reports provide insights into sales and performance metrics for your advertised ASINs in all campaigns that received at least one impression. You can use this report to see how your ads are performing over time to help you determine if you need to change your advertising strategy. Advertised product reports offer a custom date range of the last 90 days, and the data is at a maximum 12 hours old.
For more information on AmazonFresh, email [email protected]