Amazon Fresh

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For the exclusive use of O. Camacho, 2015. 9 -6 1 5 -0 1 3 REV: AUGUST 15, 2014 RORY MCDONALD CLAYTON CHRISTENSEN ROBIN YANG TY HOLLINGSWORTH AmazonFresh: Rekindling the Online Grocery Market We believe that a fundamental measure of our success will be the shareholder value we create over the long term. . . . We will make bold rather than timid investment decisions where we see a sufficient probability of gaining market leadership advantages. Some of these investments will pay off, others will not, and we will have learned another valuable lesson in either case. — Jeff Bezos, 1997 Letter to Shareholders As Fishmonger Ryan Reese skillfully filleted a fresh rainbow trout at Seattle’s Pike Place Market one morning in late…show more content…
For the exclusive use of O. Camacho, 2015. 615-013 AmazonFresh: Rekindling the Online Grocery Market traditional grocers and startup competitors were springing up around the country with their own online offerings. While Reese busied himself wrapping the fileted trout in newspaper, Amazon was busy mapping the future of online grocery. Would there come a day when most grocery shopping was done online? If so, how would Amazon compete with established retail chains like Safeway, which was energetically opening online channels and already had a string of warehouses nationwide? Most urgently, Amazon needed to plan AmazonFresh’s next step. Should the company continue refining its business model in Seattle or expand to another city? What factors should it take into account when planning its next move? A Brief History Jeff Bezos launched as an online bookstore in 1994 after reading a forecast that web commerce would grow by over 2000 percent annually. initially offered a catalog of over 1 million titles and sold at discounts of 10–30 percent below brick-and-mortar stores’ prices. The company was an instant hit. In its first week sold $12,000 worth of books; by the year’s end, sales had surpassed $500,000.4 In 1998 Amazon expanded into two more retail categories, music and DVDs/videos. Over the next 14 years, Amazon systematically added a wide range of retail categories, including
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