Amazon Delivers Gourmet Groceries

Discussion
Oct 29, 2003
George Anderson

Report and commentary by George Anderson


Amazon.com is in the grocery retailing business. This past weekend, Jeff Bezos and company launched a gourmet-food department on the Web site offering products from nearly 200 merchants, including Seattle neighbor, Starbucks, Dean & Deluca, Harry and David, Marshall Field’s and Omaha Steaks.


The online giant will follow the same script it has in other product categories by processing orders for merchants that ship the actual product.


Amazon posted its first ever profit outside the fourth quarter in its recent third quarter financial statement, in large part because of sales by third-party vendors through its Web site. Nearly one in four dollar sales registered by Amazon in the third quarter was from third-party sales.


The retailer makes its move into a category dominated by female consumers at a time when women have also become the major force in online sales. Recent numbers from a Bizrate.com study show 62-percent of online purchases being made by women.


The 20 most popular selling items (as of a check at 6:45 EST today) in the Amazon.com Gourmet Food Store were:


  1. Starbucks House Blend Universal Grind Coffee, 6 12-Ounce FlavorLock Bags (72 ounces total)

  2. Starbucks House Blend Whole Bean Coffee, 6 12-Ounce FlavorLock Bags (72 ounces total)

  3. Starbucks Espresso Roast Whole Bean Coffee, 6 12-Ounce FlavorLock Bags (72 ounces total)

  4. Smoked Turkey from Harry and David

  5. Starbucks Breakfast Blend Universal Grind Coffee, 6 12-Ounce FlavorLock Bags (72 ounces total)

  6. Frango Mint Chocolates (1 lb.) from Marshall Fields

  7. Frango Dark Chocolate Mints (1-lb.) from Marshall Fields

  8. Starbucks Colombia Universal Grind Coffee, 6 12-Ounce FlavorLock Bags (72 ounces total)

  9. Starbucks Espresso Roast Universal Grind Coffee, 6 12-Ounce FlavorLock Bags (72 ounces total)

  10. Fancy Candy Platter from J&D Fine Foods

  11. Wildwood Mulling Spices Ten Teabags

  12. Wildwood Mulling Spices Four Teabags

  13. McTavish Hazelnut Shortbread

  14. Wildwood Mulling Spices One Ounce

  15. Royal Fruit Chocolates Jar from Harry and David

  16. Frango Mint Chocolates, Chicago Skyline (1-lb.) from Marshall Fields

  17. San Joaquin Valley Farms Pistachio Berry Mix – 6 oz. bag

  18. Sliced Smoked Salmon 1lb. from elizabar.com

  19. Manor House Loaf from elizabar.com

  20. See’s Candies 1 lb. Nuts & Chews

Moderator’s Comment: Will Amazon’s Gourmet Food Store be successful?


It is interesting to balance the Amazon story with the news that NeXpansion has closed its Endless Aisle business. The concept, which by all accounts was
well received by retailers and the consumers who used it, offered shoppers online access to order products not found on the shelves of participating supermarkets. Acme, Ahold,
Delhaize, Harris Teeter and Pathmark were some of the chains offering the service.
[George
Anderson – Moderator
]

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