It's easy to be green at Amazon.com.
Supplementing Amazon's existing assortment of eco-friendly electronics and home improvement items is a new grocery “Green Store” that boasts well-known food and nonfood brands like Seventh Generation, Nature's Path, Cascadian Farms and Kashi.
New items are frequently added to the mix. Recent introductions include Nutiva Coconut Oil; GoGo organic steamed rice; Healthy Handfuls portable organic snacks; and Alter Eco Fair Trade coffee, tea and rice.
“Our green store creates an environment in which customers can discover new organic and earth-friendly products and rate, discuss and recommend them to others,” Tom Furphy, Amazon's consumables vice president, told SN.
As with Amazon's traditional grocery offerings, the green store comprises mostly multi-packs. An eight-pack of 32-ounce bottles of Seventh Generation All-Purpose cleaner sells for $31.47; Nature's Path organic Flax Plus cereal, $21.05 for six 11.5-ounce boxes; and YummyEarth organic lollipops, a 5-pound bag containing about 350 pops, $25.
Shoppers can be assured that green store items are truly green, as all products are held to strict standards:
Groceries must be made of at least 95% Certified Organic ingredients. They must have only natural ingredients, and must contain no GMOs and no animal products from animals raised on antibiotics or growth hormones.
Household items must be biodegradable, non-toxic and contain mostly natural ingredients. All items must come in recyclable packaging. Paper items must be biodegradable or made from 100% recycled material.
Baby care products must contain only naturally derived, non-petroleum ingredients. They must come in recyclable packaging and cannot be tested on animals. All diapers and wipes must use a chlorine-free whitening process that prevents chlorinated hydrocarbons from entering the environment.
“We set a very high bar to allow items in the store,” Furphy said.
While traditional groceries like diapers, coffee and vitamins are Amazon's top-selling groceries, Amazon is seeing a growing interest in green products, according to Furphy. For one week last month, an organic lollipop was the top-selling item.
“We are continually surprised at the variety people buy,” he said.
Amazon's green strategy comes at a time when the U.S. organic industry grew 21% to reach $17.7 billion in consumer sales in 2006, according to the Organic Trade Association, Greenfield, Mass. (The OTA has not released 2007 figures yet.)
In catering to green consumers, Amazon is following in the footsteps of brick-and-mortar retailers that are making more of an effort to meet the needs of consumers interested in whether the foods they eat are safe for themselves, their children and the environment.
Last year, for instance, Ahold USA's Stop & Shop/Giant division launched dedicated 4-foot sections in the household cleaning aisle for cleaners that are marketed as natural and environmentally safe. Selections include tub, tile and wood cleaners; wipes; dish and laundry detergents; and air fresheners. Featured brands include Method; Sun and Earth; Holy Cow; Seventh Generation; and Imus Greening the Cleaning laundry detergent and all-purpose cleaners.
Other retailers, however, segregate green products — both food and nonfoods — in store-within-a-store concepts.
But some question this approach. As reported in SN, the natural and organic markets are mature enough to warrant an integrated merchandising approach, Denis Ring, president and founder of Bode International, said at the Healthy Foods International Exposition and Conference, held last month in Dallas. Organic isn't niche anymore and shouldn't be treated as such, he said. By integrating, retailers can attract consumers who may not view themselves as green and may not shop a separate section.
Ted Taft, managing director of Westport, Conn.-based Meridian Consulting, agreed. While Amazon's green page is an interesting strategy, he predicts that online consumers will shop Amazon's grocery assortment much in the way they shop supermarkets.
“Consumers tell you time over time that it's a lot easier to have all options together, rather than separated,” he said.
Amazon's green grocery and household products join about 80,000 groceries currently available at Amazon.com, up from 10,000 when the grocery service was launched two years ago.
Jim Hertel, managing partner at Willard Bishop Consulting, Barrington, Ill., attributes Amazon's success to the fact that it has developed a sound business model and sticks to it. This takes form in several ways, including aligning with vendors that support its multi-pack approach, Hertel said.
“The lesson there for traditional food retailers is to understand your business model, and then make assortment and business decisions around that model,” he said. “Many retailers may just take every [product] that's new in market, and it may not be consistent with their business model.”
Amazon has an advantage over traditional retailers in terms of its technological prowess.
“Once you establish a relationship with Amazon, it can understand your purchase behavior and introduce new items that you may not have heard of,” he said. “There's an awful lot of power that's inherent in the technology.”
Last year, the retailer started catering to fans of grocery delivery services by testing AmazonFresh home delivery of meat, seafood, produce, cheese and other perishables in Mercer Island, Wash. The service has since been expanded to more than 20 ZIP codes in Seattle.
Such moves are part of an effort to serve a broad base of customers. Amazon wants to cater to everyone, from those with special dietary needs to those who are loyal to certain products and brands, Furphy said.
Likewise, Amazon is committed to the lucrative young-mother demographic, Furphy noted.
“We know that Amazon is a great place for moms to shop,” he said. “Not only can they get diapers for the baby and cereal for the toddlers, but they can also order their household and personal care items without a time-consuming trip to the store.”
To support growing customer demand, Amazon.com plans to open a new fulfillment center in Goodyear, Ariz., during the third quarter of 2008. The new facility will be more than 500,000 square feet and will create more than 600 full-time positions this year, with an additional 700 temporary positions during the 2008 holiday season.
Along with its assortment, Amazon is strengthening its price positioning.
While Amazon.com currently doesn't accept coupons, it has plenty of other ways for shoppers to save money. One way it's catering to price-sensitive shoppers is with its year-old Subscribe & Save, which provides 15% off plus free shipping on regularly used items like coffee, shampoo and laundry detergent. Members get automatic shipment of requested items in one-, two-, three- or six-months intervals.
“Saving 15% keeps [shoppers] from worrying if they're missing out on a great sale somewhere,” he said.
Brands that are included in Subscribe & Save often outperform those that are not, said Furphy.
Also new at Amazon is a collaborative effort with manufacturers called Vine Voices, in which 1,000 of its top customer reviewers can receive early-release or pre-release products in return for posting reviews. Unilever recently used Vine for the pre-release of its Degree Clinical Protection deodorant. Amazon has also conducted Vine campaigns for Seventh Generation's Eucalyptus Lavender detergent and Procter & Gamble's Venus Embrace razor.
“It's a great way for a manufacturer to receive early feedback on their products, and an even better way to create buzz around new products,” Furphy said.
Amazon.com's green grocery page bundles Certified Organic foods, non-toxic household products and eco-friendly baby items
Among the featured products:
Seventh Generation Paper Towels, three-count pack, package of 10, $40.99
Ecos Liquid Laundry Detergent, 100-ounce bottle, package of four, $34.99
Nature's Path Organic Heritage Flakes Cereal, 32-ounce eco bags, package of six, $42.94
“gDiapers” featuring decomposable diaper liners, package of two pants plus 10 liners, $26.28