Over the past few days supermarket chain Morrisons announced collaboration with Amazon to distribute its products through the online retailer. The move is likely to have ruffled a few feathers among its competitors and potentially creates a significant network for Morrisons to exploit.
Tesco currently dominates the online grocery market with a 40% share as opposed to Morrisons minor 3%. Hence the partnership creates a significant path into the market utilising Amazon’s online presence and logistics structure to reach a wider network of customers. In addition, Morrisons will use its existing partnership with Ocado to deliver to a wider range of destinations across the country.
On paper the partnership looks like a fantastic opportunity for the firm to launch onto a wider platform with minimum investment. However, the difference between e-commerce and traditional supply chains should not be understated. Growth in the online market could significantly reduce efficiencies in the Morrison network if operations are not in line with the e-commerce requirements. Keeping track of growth and adapting operations accordingly is key to the success of the partnership. If done correctly, this could transform the online grocery market.