Another week, another innovation from Amazon. This time it is the introduction of Amazon Pantry to the UK. The service, which is already available in the US, Germany, Austria and Japan, was made available on Monday to UK Prime members.

Amazon Pantry allows shoppers to fill a box with up to 20kg of non-perishable groceries for next day delivery at £2.99 for the first box and extra boxes charged at 99p.

The idea of Amazon Pantry is to make it easier for customers to buy bulky everyday essentials, and ahead of the potential launch of its Amazon Fresh grocery service across the UK, it could be a way to encourage its customers to think of it as an alternative to the supermarket.

Filling the box

As shoppers browse through 4,000 branded non-perishable items including food, drink, pet supplies, health and beauty and household essentials, they will be able to see how much 'room' each item takes up in their Pantry box. As items are added the percentage space remaining in the box is shown, encouraging customers to fill up their box to 100% and therefore spending more money on the platform.

Steve Mader, VP of digital and retail insights at Kantar, told Essential eCommerce this mentality of filling up the box to get your money's worth is typical of a Prime member's shopping behaviour.

"Amazon Prime has an upfront cost of £79 per year and you want to reap the rewards of Prime so you will spend more of your wallet on Amazon. The average Prime shopper spends four times more with Amazon and you would expect Pantry to be similar," he explained.

Mader said a lot of Amazon's latest innovations are all being aimed at the Prime shopper. "It is continuously layering on digital services, additional points of value and convenience."

He also noted how Amazon has taken its learnings from its US launch as well as advice from its strategic suppliers before bringing it to the UK. The tech giant has clearly spent a lot of time thinking about the economics of the model to make it profitable, the most obvious innovation is requiring customers to fill a 20kg boxes.

"This aggregates individual products, whereas the core Amazon strategy was to mail off individual orders rather than to consolidate, on top of that customers have to pay for shipping of at least £2.99."

Adoption

But while the prices of Pantry items are comparable to those of the UK grocers, Mader says consumers can already buy all of these non-perishable goods along with their fresh items online for next day delivery from all the major grocers. And if Fresh is indeed around the corner and follows in the footsteps of the US model, it will be a separate business from Pantry which will mean customers will have to make two separate orders from both Pantry and Fresh for their household shop.

"This could hinder adoption and is something Amazon has to think long and hard about," he added. "Because there's nothing differentiating about the platform or offer from what's already out there from the grocers."

Danielle Pinnington, MD at Shoppercentric, agreed, saying that while it is another option for customers, it is hard to know where Pantry fits in.

"We can’t help wondering if all this complexity from Amazon is simply confusing shoppers and putting them off getting involved. UK shoppers are not shy to try new things, but they are very quick to revert back to the norm if things get too complicated. As our own research showed, UK shoppers want life made easy – not more complicated."

Costs

Compared to the delivery of fresh groceries – which Amazon is currently trialling in Birmingham – Pantry is a relatively cheap endeavour for the tech giant.  

Catherine Shuttleworth, CEO at Savvy, said it helps that Amazon is only offering branded products. "The big question in Fresh remains over private label. In the UK we purchase significant volumes on fresh food through supermarkets' own label products which we have grown up with and trust. The benefit of Pantry is it is only offered on branded products and therefore easy to price compare."

Senior consultant at Conlumino, George Scott, also noted  how Pantry is cheaper to deliver than fresh food, due to the lack of refrigeration logistics.

"Amazon Fresh in the US charges an extortionate amount of money on top of Prime membership, because  obviously the fresh stuff is much more expensive to deliver. I think Amazon is trying to figure out with Fresh what they can do and make money out of," he said.

"But the point of difference has to be on price and convenience," added Scott. "And Amazon has massive strengths around this and compared to Fresh, Pantry is a lead-on from its more traditional presence."

But because Pantry is part of Amazon's traditional retail model rather than a grocery model, it also means it is not offering hourly delivery slots – sticking to its 'next day delivery' as its USP instead.

Scott said Amazon is probably still trying to work out its modelling, but its distribution network is not set up to provide time slot delivery. "Offering slots is not straight forward," he said. "Grocers have the knowledge about their consumer habits built into things, but Amazon is not used to delivering on a daily or weekly basis."

Curated boxes

Scott also noted how Amazon Pantry's pre-made boxes could be popular with shoppers. The e-tailer has curated themed boxes, including 'Birthday in a Box', 'Everything for a Weekend Away' and 'Off to University', as well as branded boxes such as 'Dove Essentials'.

Scott said this could be a unique service. "No one else has even though about doing that and it really makes a point of difference," he said.

He said Amazon could potentially recommend certain boxes based on its customer behaviour information, such as a box for smaller households or brand affinities, as well as a calorie box with enough food for a week's dieting.

"Online subscriptions are becoming so big – such as fresh fruit and veg boxes and posh meal kits – Amazon could tap into that. And because it has such a strong presence in its supply chain it has so much power to be able to do so."