Shoppers can now get their Morrisons groceries delivered from store in an hour – by Amazon.
The Morrisons at Amazon service, which launches today, enables Amazon Prime customers to order their Morrisons shop via the Prime Now app. Orders will be picked at a Morrisons store and delivered same day by Amazon within an hour for £6.99, or for free within two hours.
At launch, the service is available in selected postcodes in areas including London and Hertfordshire.
The supermarket has been supplying Amazon wholesale since June, an arrangement that has since expanded to thousands of products. Today’s news extends that still further.
Morrisons says the partnership with Amazon does not require heavy capital investment and is part of a strategy to generate incremental profits of between £50m and £100m a year.
David Potts, chief executive of Morrisons said: “As food maker and shopkeeper we have unique skills to help build a broader new Morrisons through capital light growth. ‘Morrisons at Amazon’ is another exciting joint opportunity and makes Morrisons good quality, great value-for-money products available to even more customers.”
Mariangela Marseglia, director for Prime Now EU, said: “We are delighted to welcome Morrisons’ increased selection to the Prime Now app, enabling us to grow the selection of items available to our Prime customers for one hour delivery.
“Morrisons store selection is in addition to existing local stores available on Prime Now – John Bell & Croyden and Spirited Wines – helping us to provide more than 10,000 additional items to customers for ultra-fast delivery, and we look forward to adding more stores and reaching more customers in the future.”
Amazon says membership of Prime grew by 51% last year. US membership was 47% up, while growth was faster in international markets. In the UK there are now millions of members, and tens of millions worldwide.
Commenting on the news, Tim Reay, head of grocery at Salmon , said: “Morrisons’ launch of a grocery service, in association with Amazon, is a noticeable shift that retailers must take to meet the demand that consumers now crave. The service will enable Amazon Prime Now customers in selected areas to order items online that will then be sourced from Morrisons stores and delivered to selected postcodes, either within an hour or two hour slot. As Black Friday and the Christmas period approaches, immediacy will only continue to rise in importance. Salmon’s own research predicts that ‘Black Fiveday’ sales will reach an impressive £5 billion for the first time ever, with £2.55 billion purchases expected to be made via mobile.
“In the run up to the holiday period, Morrisons new service will ensure the vendor is in a good position to reap the financial and reputational benefits from consumers seeking an efficient shopping experience. Big shopping events like Black Friday have grown over the years, and implementing a full-proof strategy, strong back-end systems and fluid supply chain is paramount. Preparation will be key to retailers navigating the demanding holiday period.”
Our view: Over the years Morrisons, which was the last of the leading UK supermarkets to sell its groceries online, has experimented with a variety of approaches to catching up with its rivals as a multichannel retailer. It bought, and then sold, Kiddicare as part of a strategy to develop its own expertise in-house. But the supermarket seems to have decided that outsourcing ecommerce development works best for it. It first did that by working with Ocado, whose technology and fulfilment centres underpin the Morrisons.com service, and now a partnership with Amazon that started as a wholesale supply arrangement has expanded to provide home delivery from store. This takes the wider concept of working with third party retailers and marketplaces a step further, and it will be fascinating to see how that develops in coming months – and how profitable this proves to be for Morrisons.