Here's two headlines from the same email which I received from Marketing Magazine:
eyes international expansion of grocery business
to launch non-food sites in 'hypermarket' drive
So, are we set for a wonderful combination of increased competition driving down prices? Sadly I don't think so. Each of these two huge brands have very clear ideas of who their target markets are and though I am sure there will be as much theft of consumer as possible between brands, I don't think a price war is imminent. But there will be battles for new audiences - I don't go on to Amazon for my bread, nor to Ocado to buy guitar strings.
More entrants in the market will provide more choice, but I can quickly see a time when a whole new industry arises around on-line grocery shopping - where the fulfilment is a different organisation to the seller.
Picture this, in your town an Ocado, Tesco Direct, Asda (new entrants to home delivery) and an Amazon van all out and about delivering groceries. Wouldn't it be more cost-effective to have one van for the food and small goods? (I'm not talking sofas here.)
We already have 'white van' drivers who deliver for multiple non-food goods, so what about it for food? It's very possible. You have your huge delivery of fresh broccoli and you pack and label them according to how many orders you get from the marketers. A 'print on demand' solution for non-branded goods.
And for brands, the challenge will be to ensure their unique selling point is a strong one. That's a challenge they face now - whether it's ketchup or kitchen towel - but my goodness I can see that search optimisation and brand values are going to be a whole new challenge for marketers. How do you get that wonderful 'Bisto family' feeling in a search term? You will have to rely on traditional advertising to build brand values and develop customer loyalty, but will it work in an era when you can simply search 'best gravy mix' and find something just as good, but much cheaper? Marketers live in 'interesting times'.
We are some way off from all shopping being on line and seeing our beloved (or behated, in some cases) supermarkets closing their doors to the browser, and opening the browser as their doors, but I do see big changes ahead, and soon. These two super-players are simply flexing their muscles ready for the battle ahead.
Picture courtesy of http://www.whichbetter.net/comparison/online-vs-offline-shopping-which-is-better/