With Amazon testing brick-and-mortar grocery store formats, can supermarkets keep up with the challenge? Not really, according to L2’s Amazon Grocery report. Even category innovators have failed to make significant investments in mobile and targeting, two areas where Amazon is particularly strong – leaving them primed for disruption.

Given that 84% of consumers say they would enjoy shopping more at Amazon Go than a traditional grocery store, brands face growing pressure to provide an integrated in-store mobile experience. But while all grocers in L2’s study have a mobile app, just 59% offer in-store functionality, and none take advantage of beacon technology, which could be used to notify customers about opportunities to use coupons on specific items.

Grocery features

Amazon also makes a challenging competitor because of how much data it gathers about user tastes and habits, allowing for sophisticated targeting. To keep up, the study makes clear that retailers should work harder to leverage digital data they already possess, as well as looking for easy ways to increase granularity. Yet fewer than half of grocers allow users to access their online order history, even though 80% of accounts are tied to online and in-store loyalty programs. And none of them incorporate additional data-savvy features like “Subscribe & Save” programs, which could be used to identify brand preferences and create recurring revenue. Most crushingly of all, no brands display personalized item recommendations when users log in – one of Amazon’s biggest strengths.

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