Watch out Amazon-lovers, Woolworths Limited (ASX: WOW) has just implemented an Amazon Prime-like shipping service for its Dan Murphy's line of spirits. For those who don't know, Amazon Prime is the ultra-quick shipping service that 'customers didn't know they wanted' promising rapid delivery of items to eligible areas.
While Prime's service is more comprehensive, Woolworths-owned liquor outlet Dan Murphy's has implemented its own shipping program, exclusively for Dan Murphy loyalty cardholders. For between $50 and $80 a year depending on location, customers can receive unlimited home delivery of wine and spirits and up to 10 cartons of drinks per year.
(And if you are wondering how this writer knows about this service, well, a little bird told me. Ahem.)
When you consider that delivery typically costs a few dollars, for the regular bon vivant's the service could provide a surprising amount of value. It could simultaneously prove a boon for Woolworths if the company is able to profitably grow its market share using this method.
Perhaps more crucially, this development shows that competing with Amazon is not beyond Australian companies. Amazon doesn't have a patent on customer service innovation. Both Woolworths and Wesfarmers Ltd (ASX: WES) owned, Coles supermarket have a solid track record in this area, and have already established delivery services and click + collect programs for their grocery stores. Not only does this remove a potential point of difference for Amazon, but Woolies and Coles already have local distribution networks set up, giving them a cost advantage.
Many things may change when Amazon comes to Australia, yes – but I'm betting many more things will stay the same.
