Ultrafast Fresh Expanding, 3P Inventories Growing, Private Label Penetration ModestBy Cleveland Admin
Amazon Ultrafast Fresh Continuing to Expand
Our research indicates Amazon is continuing its efforts towards the expansion of Ultrafast Fresh. The Las Vegas UFF market is expected to be live in early July and SpartanNash warehouses will be ready towards the end of May or early June in Dallas, Texas. The July timing is a little delayed from 45 days ago when Amazon was suggesting June. We attribute the delay to Amazon continuing to work out the operational complexities in the Philly test market. While most manufacturers selling through Fresh discount the pace at which Amazon suggests they can roll out the service to all markets (e.g. perhaps not by the end of ’19), the positive results in Philly combined with the potential for Amazon to remove the monthly membership fee leave them feeling more positive on the potential for the program going forward.
Amazon Pushing for More 3P Inventory to Enable Overnight Shipping
CNET reported that Amazon recently sent an email to 3P sellers offering discounts of up to 75% on warehouse fees in exchange for storing more high velocity SKUs with the eTailer. This appears to be driven by Amazon’s move to overnight Prime shipping, as the eTailer needs more inventory closer to consumers in order to enable this initiative. According to the email, the promotion starts in June and will run through January 2020, and sellers will need to maintain inventory levels and have sold at least 60 units of each product on a monthly run rate, or have a specifically selected ASIN from Amazon.
Amazon Private Label Penetration Remains Limited
Polling from this week’s Webinar indicated more than 70% of brands have not seen Amazon Private Label have a meaningful impact in their category, with only 6% experiencing meaningful share losses.