Amazon Fresh Investment; Alibaba Sets Record; Pandemic Savings for Consumers
The COVID-19 pandemic has dramatically altered how consumers are buying groceries with a major shift to online platforms. As a result, a net 64% of brands plan to increase their level of support for Amazon Fresh in ’21 and nearly 30% indicate that Amazon Fresh is a clear winner among other online grocery platforms. In our recent consumer research report, we compared Instacart, Amazon Fresh, Walmart Pickup & Delivery, and Target.com/Shipt. That said, it was Amazon Fresh that stood out positively across a range of factors, including overall experience, assortment availability, ability to find products, mobile experience, and quality of content. It is important to note the other three platforms are executing at a high level on these criteria as well, furthering the competition for Fresh in ’21.
Source: IMD Business
Alibaba’s Singles Day Record :
Alibaba raked in an equivalent of $75.1B during its Singles Day event, surpassing the revenue of the U.S’s Thanksgiving, Black Friday, and Cyber Monday combined. To put this number in perspective, Amazon’s US GMV reached an estimated $75.7B in 3Q20 (1P and 3P combined). This year, Alibaba extended the event from one day to several days; consumers were able to shop on November 1-3 in addition to November 11th, which helped Alibaba break the previous record by 12:30 AM on Wednesday. The success of the shopping festival further underscores the popularity and growth of global eCommerce in a year marred by the coronavirus pandemic with consumers looking for deep discounts and having the propensity to spend on luxury goods in lieu of taking vacations.
Consumers Bulk Up Savings:
While we’ve seen a significant step-change in the growth of eCommerce as a result of the COVID-19 pandemic, consumers are also being careful with their spend. Government stimulus through the CARES Act and unemployment benefits have more than offset the loss of income from wages due to the pandemic. Nevertheless, consumers are still saving a portion of that income as well as reducing spending to hedge for ongoing uncertainty. Our research shows the current savings rate is 7 points higher than it was in February and 52% of extra savings are coming from a cut in spending. It remains to be seen how spending and savings will be affected as cases of coronavirus rise exponentially.
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