Saturday , July 2 2022

Spain: White brand Amazon in our country is going strong


Hacendado and Mercadona have another reason to worry.

Amazon, the company that invented trade practically onlineYears have passed to revolutionize the food sector. She wants to be a store for everything and have a specific strategy to cover foods. Foods are only partially affected by crises, because families can cut their costs very little even when revenues are cut. That makes him a huge market. For example, in Spain, food expenditures in 2016 exceeded 100,000 million euros.

To give an example of Amazon's commitment to food, he bought the Whole Foods supermarket chain last year and is now aiming to reach out to all Americans on their own. He had been rumored to have been behind the purchase of a large chain such as Carrefour or DIA in Europe for some time now. But now and without the relevant purchase, the strategy they are encouraged to attack the market is the use of white marks.

Spain Market

In Spain, the food market has an open dominion and Mercadona. It has a quota of 24% compared to 8.5% of Carrefour. Percent online This sector is still low, around 1-2%. And Mercadona has a share of 46% (this data is provided by the director of Mercadona Tech). Anyone who makes a purchase on Mercadona Online is surprised, because their experience is highly desirable.

Mercadona, therefore, has a bad online experience, but is also an important player in the market. Then we'il analyze how he did it.

Amazon has been promoting the sale of food products in Spain for some time now. The first thing he did was put it in products that didn't break the catalog, it was a relatively simple thing, but soon after he started selling fresh products through the Prime Now platform in Madrid, Barcelona and Valencia, fast deliveries (up to 2 hours from the order) and the logistics of day supermarkets. .

This led the Amazon to have an online food sales quota of 14%, according to the Cocktail study. Although this study tells us that Mercadona has 22%, it was 46% of the previous rate. Regardless of the numbers, the relative data is clear: the leader Mercadona and the latter is controversial between Amazon and Carrefour. But all of them for a very small market, but as seen in the US, it will grow and continue to grow strongly.

Amazon strategy

While Amazon didn't buy a supermarket with a presence in Spain (as was said, the rumors were pointing to Carrefour and Día before the stock market crashed) on the following strategy. On the one hand, your "normal" store has a catalog of products that don't spoil, and it's fast and free shipping for those registered in Amazon Prime.

On the other hand, deliveries to the Prime Now store for Madrid, Barcelona and Valencia residents have less than an hour (at a cost) or within two hours (at no charge for the minimum order amount). There are fresh products, in fact great power. This and express deliveries are not like Carrefour, which delivered the deliveries of Mercadona for a few days or the next day.

But the Spanish market has its own characteristics. What is essential is that we usually buy white label products that are often inexpensive. The main reason is that we are very well used: Mercadona has very high quality white marks.

That's why Amazon has launched white brands. The food was always out of the basics of the Amazon, but now the food has Happy Belly and Wickedly Prime for a few months.

We have to be aware of another problem: Amazon has often concealed white marks. This has been seen for years, most of the products they sell are actually produced by Amazon, but not as advertised. There are some researches discovered by Amazon that have discovered dozens of hidden white signs.

What is the reason for doing this? There are a few candidates, none of which is 100% opposite, because Amazon doesn't mention it. First, not to disturb companies using their own logistics platform, because if they discovered that they were selling their own products, they could leave the platform. Another reason is to win margins: If Amazon discovers it has a very good product range, it decides to produce it, put it at a competitive price, and encourage it in searches. And another worse reason is to fill a product segment: for example, if you want to sell a large number of bags, but some brands are encouraged to place them, Amazon puts their models in a way that the store is more plentiful and thus attracts customers and other brands.

As in nutrition, quality is very important and therefore the brand is recognized. The hidden brands strategy then doesn't think that if it does, it will work well. And it seems that right now: only the products of known brands and these new white brands.

Strategy of Mercadona

Of course, Mercadona is more transparent than Amazon, at least in the case of white brands. Its brands are generally quality and corrected prices (Hacendado, Bosque Verde, etc.). This allowed him to download his catalog, made a strong choice for his products and was effective when he needed to have less variety.

Mercadona Workshop

Although it has a very bad website in its online number, although it is a logistics in its stores (1627, but lacking flexibility), we have already seen how leaders are. However, they have a new prototype in Valencia and a much more modern website with a centralized logistics. The experience of the new website is very good, focused on more grids and large shopping lists than the product page (they are strongly advocated); Amazon focuses more on its product page, and this is a problem to make strong purchases with many items, although Prime Now is less charged.

Therefore, the leader does not rely on his own shows and has a much better website with mobile applications. It has the advantage of having well-known products, proximity stores, a good brand without confusion (such as warehouse personnel or tax evasion, etc.) and no more clear focus on food.

Are we having a problem with Mercadona?

The launch of Amazon's white brands clearly shows that they want to go to the food market and that Mercadona must be very conscious. Amazon customers who pay the premiership service do not see this as a wreck (but) as an investment, but as an investment, and just like it. e-commerce save money on shipping costs to other websites (even if other websites are cheaper, even when adding shipping costs) from Mercadona. Amazon's problem with the meal was prices and white spots (hidden or not) could be a shock.

The battle will be long and hard, but Mercadona also has advantages: There is a good quota, recognition and ultimately a good online strategy with a lot of experience in Spain. The key to me is that although the website is a very bad and mobile application, it is also the leader in Spain. Therefore, it is not possible to underestimate people's valuation of their products according to other factors.

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