Amazon is the biggest threat to wholesalers in the UK, delegates at the FWD annual conference on 27 June were warned.
Richard Fletcher, founder of Foodservice Online, an e-commerce and management consultancy for wholesalers, told delegates: “Amazon are in our space and taking market share.”
Fletcher said a “radical mindset” was needed to compete with Amazon, suggesting wholesalers no longer needed warehouses, products or vehicles, but instead should invest in technology.
Fletcher, an ex-Aldi area manager, presented research from Mirakl & Forrester that concluded Amazon was dominating the US foodservice industry. Food and drink wholesale was one of the categories most at risk, according to the report, which singled out Brakes’ US owner Sysco.
According to figures published in September last year in an Amazon blog, Amazon Business is growing twice as fast as Amazon Marketplace, its consumer equivalent, taking just three years to reach $10bn in annualised sales. Amazon Marketplace took seven years to reach that value.
Amazon Business offers its members more than a hundred million products. Setting up an account is free and enables the registered company access to features including discounts, a pay by invoice option, and downloadable VAT invoices. Business Prime membership is also available from £80 a year, offering unlimited fast free shipping.
The warning came as a survey of delegates revealed the heaviest investment being made over the next 12 months in their businesses would be technology (38%).
Fletcher also said there was an opportunity for wholesalers who could adapt. “Technology allows a new way to grow, a platform revolution which links the customer and supplier,” he said. “There has never been a better opportunity for traditional wholesalers to grow in an affordable, efficient way.”
Charles Wilson, CEO, Booker also cited Amazon Business (along with Morrisons and Co-op) as a new entrant to be aware of during his speech, but added that Booker was well placed to compete, and revealed that Booker’s delivered sales would surpass cash & carry sales for the first time this year.
“What we are doing digitally is key [to this change],” Wilson added.
In 2017-2018 Booker’s delivered sales accounted for £2.6bn with cash & carry at £3bn. Revenue from online sales was £1.5bn.
FWD chairman and Bidfood CEO Andrew Selley also stressed that Bidfood was well set up to benefit from its investment in technology. “We are already providing an Amazon Prime-style service, but with a personal [touch],” he told delegates.
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