US: Amazon To Open Physical Grocery Stores?

Amazon is reportedly moving fast to open physical grocery stores in the US, in a sharp departure from its online-only operations.

According to the Wall Street Journal, the company is looking to open small stores that will stock only fresh items, such as milk, produce, and meats. The paper also said the stores initially will cater exclusively to members of its AmazonFresh service.

The report added that customers will also be able to order non-perishable products through in-store touch screens or through an app, which can then be picked up from drive-in locations.  The WSJ said the pick-up deliveries will be delivered to customers’ cars by employees using a license-plate reading technology meant to speed up wait times.

The paper’s sources said that Amazon is looking to hard discounters and dollar stores for inspiration, adding that the stores may take a year or more to open while Amazon hunts for locations.  They also noted that the plans may be dropped due to financial or operational concerns.

Meanwhile, the Geekwire website has published what it claims are photos of an upcoming store in Seattle, which will offer drive-in collection.

Amazon has not yet commented on either report.

NAM Implications:
  • Where at: Focus on fresh means maintaining speed as a key criterion. Restricting to AmazonFresh members means saturation coverage to generate viable traffic.
  • Where headed: If it works, another first for Amazon, with little downside…
  • Effect on you: ‘Amazon Speed’ adds similar time-pressure to other categories?
  • Action: Anticipate growth of offering to embrace other products/categories…
  • Meanwhile, Amazon’s pick-up plans represent going a step closer to ‘collect-customers’…
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