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Amazonfresh: Rekindling The Online Grocery Market

Amazon Fresh should expand its online grocery delivery service to a new city like New York or Los Angeles in order to test its business model in a new market, build brand awareness, and increase sales and market share. Expanding to a second city would allow Amazon to transfer lessons learned from Seattle, take advantage of existing grocery warehouse infrastructure, and grow beyond the low 5% market share achieved in Seattle. Testing the business model in a new city is necessary for Amazon Fresh to broaden its size and customer base.

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Arpita Choudhary
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394 views1 page

Amazonfresh: Rekindling The Online Grocery Market

Amazon Fresh should expand its online grocery delivery service to a new city like New York or Los Angeles in order to test its business model in a new market, build brand awareness, and increase sales and market share. Expanding to a second city would allow Amazon to transfer lessons learned from Seattle, take advantage of existing grocery warehouse infrastructure, and grow beyond the low 5% market share achieved in Seattle. Testing the business model in a new city is necessary for Amazon Fresh to broaden its size and customer base.

Uploaded by

Arpita Choudhary
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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AmazonFresh: Rekindling the Online Grocery Market

Should Bezos direct the Fresh team to continue refining AmazonFresh’s business model
or expand to another city?

Jeff Bezos should expand to another city such as New York or Los Angeles to establish its
operations.

There are numerous benefits to expanding to a second city for the organization. By doing so,
the company's management will be able to build several market-specific characteristics that it
will be able to transfer to the new market it enters. The corporation would be able to use the
second market to put their experimentation in Seattle to the test. The company's management
would be able to assess the impact on the firm in this way. A second test city would offer a
suitable grocery warehouse near the city center to lease; building a new one could easily take
a year and require a large capital outlay. When the company extends into another city, its
market share will grow, and its brand awareness will improve.

Currently, the margins of the company and its market share are low in Seattle and the
company has been able to achieve just a 5% of the total household market in Seattle.
Therefore, in order to grow and broaden the size and market share of the company, it needs to
enter another city and test the business model there. This is going to lead to increased sales
for the company. Thus, Amazon Fresh needs to expand its business in another city

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