Quality is the most important thing for grocery shoppers: Sree Ram from Amazon Fresh

A few weeks ago, the Indian arm of tech giant Amazon announced that it was expanding its full-basket grocery service, Amazon Fresh, to more than 130 cities. Amazon Fresh’s expansion comes at a time when competition in the online grocery space is heating up.

The entry of fast-paced commerce players like Zomato-owned Blinkit, Swiggy Instamart and Zepto even prompted Tata-owned BigBasket to try offering express grocery deliveries through BB Now in March 2022. This comes a decade after BigBasket pioneered online grocery shopping through time-slotted deliveries.

Amazon Fresh operates in a similar slot delivery segment, with the earliest slot available to customers within 2 hours of placing an order. Fresh is bullish on slot deliveries, focusing on quality and a wide range of products.

In an exclusive interview with Business PerspectivesDirector Amazon Fresh Srikant Sree Ram talks about the expansion of the network of order fulfillment centers, its future strategy and the challenges it faces.

Edited excerpts:

What are the key factors that distinguish Amazon Fresh from the competition in this segment?

There are three or four things that are critical to us when it comes to consumers. The first is product assortment. A few months ago, we had about 6,000 products on Amazon Fresh. Today, it’s over 15,000 and growing.

The second element is quality, especially of fruits, vegetables and perishables, because this is something that consumers will never compromise on and should not.

The third thing that occupies our attention is to provide our customers with the best value, not only in terms of pricing but also in terms of the overall package that takes into account their comprehensive requirements.

Read: Why Amazon Fresh is focusing on quality and cashback offers in a competitive fast-paced retail market

Finally, we offer the convenience of delivery at specific times, which allows consumers to better plan their time. We learned from a report published last year by research firm LocalCircles that in this category (groceries), the most important thing that consumers care about is quality.

Do you think quality will help you attract customers, even though consumer behavior has changed drastically due to the pandemic and the emergence of fast-paced commerce?

It varies by category. Quality may not be a factor when it comes to delivering a mobile phone, but when it comes to groceries, consumers believe that quality is paramount. You can’t afford to skimp on that and it has to be the best it can be. In addition, we are constantly focusing on how to make not only the assortment but also the purchasing process as smooth as possible.

Even BigBasket has been forced to join the fast-paced commerce movement, despite starting with a time-sensitive delivery business. Does Amazon, with its deep pockets and access to data analytics, plan to do so at some point?

What is most important for us is to understand what our consumers are telling us, for example, if there are things we need to improve in our services.

Moreover, Amazon.in, as a marketplace, is uniquely positioned. Amazon Fresh allows you to buy the most frequently ordered products delivered within hours, at your most convenient time. On the other hand, the e-commerce platform has a huge selection, with lakhs of products available for same-day delivery. This ability to cater to every consumer, both in terms of range and speed, is unique to us.

So we go back to what we hear from consumers. We’ve expanded our assortment in different categories, like pet care, organic fruits and vegetables. We analyze consumer purchasing behavior to determine which product should be available the same day and which should be available the next day. At the end of the day, you have to make compromises at every level because space is limited.

What trends do you see in Fresh?

We have seen steady growth in the cosmetics, personal care and baby care categories. Each of these areas has seen high double-digit growth over the last 12 months. This summer season, mango and beverages have also seen double-digit growth. This shows that customers are willing to experiment and expand their online shopping journey beyond what were considered standard e-commerce shopping categories such as electronics and apparel.

How did fulfillment centers expand to serve 130 cities?

We keep looking for places where our service quality can improve and decide to expand our fulfilment network there. For example, a year ago, we realised that in the areas around Electronic City in Bengaluru, our service quality was not what it should have been. While we had two-hour slots in most parts of the city, we were only serving four-hour slots in that part of the city. Also, the range that we offered in other parts was not available there. Perhaps it was also a combination of demand. So, this year, we set up another FC (fulfilment centre) there.

We currently have 26 Amazon Fresh centers, and in some cases we have partners as well. In both cases, we want to prioritize ensuring that the supply chain is completely and exclusively monitored by us, because quality is becoming such an important issue.

Do you also see a need to expand infrastructure, e.g. logistics around order fulfillment centers?

I think there is a need to not only increase the number of fulfillment centers based on demand, but also ensure that we have enough delivery agents in the workforce. Growing demand is a problem. So we continue to work with our logistics partners to increase the number of employees and make sure they can support our scale.

How do you ensure that external centres also adhere to your quality standards?

So it’s a combination of SOPs (standard operating procedures) where we make sure that the right procedures are in place. There’s also an audit mechanism, which happens in two ways. First, we track different metrics, which are the leading indicators of whether everything is in place. Second, we have periodic visits from trained people.

In some cases, we have also leveraged technology by installing shelf cameras to ensure that quality monitoring does not even require human intervention.

What are the biggest challenges you face today?

Meeting the expectations of our customers is a challenge. It is a very difficult business due to the nature of the products. For example, if a customer gets a slightly rotten potato, even if it is just one of your half kg or one kg, it is a negative experience and they may not come back.

We want to make sure that in every Amazon Fresh customer interaction, they get everything exactly as they ordered and what they expect. Making sure that as we expand from 60 to 130 cities, the quality doesn’t drop is a big challenge.

We’re happy with how we’re doing now, but I think we need to work on that some more.