Amazon Fresh free grocery deliveries: What is the impact for consumers and the industry?

How will free delivery for Amazon Fresh orders over £40 impact consumer behaviour... and their attitudes towards the online giant?
28 August 2020
Amazon Fresh
Maiko Skorupski

Consumer Insight Director, Worldpanel Plus

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Amazon has recently announced that it now offers free delivery for Amazon Fresh groceries orders over £40. This gives Amazon Prime members living in certain postcodes in London and the home counties access to thousands of products from retailers like Booths, Morrisons and Whole Foods with free 2-hour delivery. Amazon also plans to expand this offer to other cities in the UK with the hope of establishing itself as a major player in the highly competitive grocery landscape.

Online spend soars during lockdown

Online grocery is one of the success stories of COVID-19, having taken a record 13.5% share of grocery spend in our most recent market update. The benefits of having groceries delivered direct to your door during a pandemic are clear, particularly for older shoppers who are potentially more cautious about leaving home. And with the Ocado and Marks and Spencer partnership coming into effect from September, it’s a dynamic and exciting time for the channel.

Fast and Fresh

So what do we know about the Amazon Fresh offer, and what impact is it likely to have on consumer behaviour and their attitude to the retailer? Data from our Worldpanel Plus ecommerce service finds over two thirds of Amazon shoppers are already buying groceries* through the online retailer, so it’s an understandable move from Amazon to see if this incentive can encourage shoppers to buy across more categories. However, the £40 cut off for free delivery is a tall order, representing more double the size of an average shopping basket on Amazon currently. It may therefore run the risk of simply encouraging shoppers to make bigger (but fewer trips) to trigger the free delivery.

Widespread appeal?

While the retailer will be hoping this new development will encourage more Brits to sign up to their premium service, the signs are that it’s more likely to encourage existing Amazon Prime subscribers to buy their groceries on the platform. In our recent survey of more than 54,000 shoppers, 8.5% of those who said they aren’t already Amazon Prime members stated the move would encourage them to sign up. Whereas, of those who said they already are Prime members, 42% said it’d encourage them to buy groceries via the retailer more often.**

There are also some fundamental barriers that will be challenging to shift especially in the short term, even for Amazon. Our survey found that the major obstacle for many is that we simply prefer to buy groceries in person (39.5% of respondents said this would stop them considering Amazon Fresh more often for groceries.)

Get in touch to find out how Worldpanel Plus can give you the full picture of shopper attitudes and behaviours, both on and offline.

Notes to editors:

*Kantar Worldpanel Plus Ecommerce data: 12 w/e 12th July 2020. Grocery defined as: Ambient Groceries, Fresh & Chilled, Frozen, Alcohol, Healthcare, Toiletries and Household

**Worldpanel Plus LinkQ – Amazon Fresh Now Offering Free Delivery Survey – 2020 – Total sample size: n=54,786

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