Amazon is set to account for a fifth of UK online spending by 2024 as it moves further into the grocery category, a new study suggests. The report, which comes in the week that Amazon opened the first of 10 Clicks and Mortar pop-up stores in the UK, said that drone deliveries were on the horizon and introduced kiosks at train stations, also suggests that the retailer’s control of its last mile deliveries will help it to boost its market share in coming years.
In its Amazon Strategic Review - 2019, data and analytics company GlobalData predicts that Amazon will grow its UK retail revenues by 58.2% over the next five years to £15.7bn by 2024 – excluding sales from third-party sellers via the Amazon marketplace. As a result, GlobalData suggests, Amazon will take 19.8% of the total online market in the UK by 2024.
The report expects food and grocery sales to be the largest growth area for Amazon, rising by 174.7% between 2019 and 2024 – ahead of the grocery sector as a whole, which it predicts will grow by 15.5% over the same period.
James Yacoub, GlobalData retail analyst, said: “Although food has not historically been a focus point for the online pureplay, it will prioritise investment in this sector through ramping up its Amazon Fresh operation, developing Whole Foods and introducing its checkout-free Amazon Go stores. Overall Amazon will grow its total online market share to 19.8% in 2024, up from 16.6% in 2019.”
Amazon is set to gain more control over its distribution network, says the report, as it invests in more fulfilment centres, vehicles and automation. In 2019 it bought robots company Dispatch,which specialises in autonomous vehicles, robotics and artificial intelligence.
“Amazon has invested in the latest thematic trend in retail from the onset of its growth, with a particular focus on its delivery infrastructure, artificial intelligence and automation,” said Yacoub. “Prime’s success has been made possible by Amazon’s focus on last mile fulfilment and 19.4% of UK online shoppers are now Prime subscribers. Amazon will continue to optimise its efficiency in its last mile delivery, which remains the most costly aspect of fulfilment.”
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