Following recent rumours, Amazon has today opened its new grocery store format in the UK. The site in Ealing, London features the ‘just walk out’ technology developed for its ‘Go’ format in the US but will operate under the ‘Fresh’ banner.
The 2,500 sq. ft. store stocks hundreds of new ‘By Amazon’ own label items such as milk and bread, and some ‘Our Selection’ premium lines, all sourced from UK suppliers. These new ranges will soon be available online as well.
There are also branded products and items that come from Morrisons and Booths, with whom Amazon has pre-existing ties through its online grocery operation. And the store will also sell some of Amazon’s technology devices.
Reflecting its relatively small size, the store’s range focuses on convenience with food-to-go, ready meals, and everyday essentials.
To enter the Amazon Fresh store, shoppers have to scan a QR code on a smartphone app. They then place items in their bag and are automatically billed when they leave. A receipt is then emailed to the customer.
As developed for its Go format that launched in 2018, the store in London features hundreds of cameras and sensors that detect what the shopper has chosen. “When you’re finished, you’re free to walk out,” said Matt Birch, a former Sainsbury’s executive who is now Director of Amazon Fresh Stores. “The focus was just creating a really easy shopping experience for customers.”
The likes of Sainsbury’s, M&S and the Co-op have been trying schemes that negate the need for customers to use checkouts. However, these still require shoppers to scan items with their smartphone or another device. Amazon’s “computer vision, deep learning algorithms, and sensor fusion” technology removes friction altogether with recent advances meaning its system can now cope with customers selecting specific variants such as a different bouquet of flowers.
The store also contains an area where Amazon online orders can be collected. And customers can return goods by scanning a code without having to repackage or relabel the item. “Hand the product over and we’ll do the rest for you,” said Birch.
Amazon confirmed it plans to open more hi-tech grocery stores on high streets in London, and look at other city centre locations. Birch stated that it had chosen Ealing because of its high local shopper footfall and good transport links.
Amazon also operates seven standard supermarkets in the UK under its Whole Foods Market brand.
Commenting on the move, Natalie Berg, an analyst with NBK Retail is quoted by the BBC as saying: “Having a physical presence will enable Amazon to address some of its weaknesses, like the mounting cost of deliveries and returns.”
However, she does not believe it will pose a significant threat to the major chains in the near term. “Supermarkets have had a few years now to prepare and test their own checkout-free shopping concepts,” she said.
In the US, Amazon operates 26 Go convenience stores, two Go Grocery stores, 10 Amazon Fresh supermarkets and more than 470 Whole Foods Market stores.
Clive Black, an analyst at Shore Capital, said he believed Amazon would want up to 30 outlets in the first phase of its expansion in the UK. He said the new store could be a “seminal moment in the history of the UK grocery market” and indicated Amazon’s ambitions in the sector.
“The patient and rather delicate expansion that the group has taken to date in the UK, revolving around gradually building its online service, notably in collaboration with Morrisons, and its investment in the rapid delivery channel through Deliveroo, were never to us going to be the full extent of its ambitions,” he said.
NAM Implications:
- Amazon thus removes in a stroke/swipe one of the Lockdown shopping resistors…the checkout queue.
- Perhaps next they will remove the remaining social distancing shopping resistors – the post-Lockdown store visit, by offering online.
- Amazon could be good at that…!?
