(Amazon founder and chief executive Jeff Bezos owns The Washington Post.)
For the next several weeks, the store will serve only a select group of customers invited by Amazon. Then it will open to the general public.
In 2017, after years of testing grocery initiatives, the tech giant planted its flag in the sector with the $13.7 billion acquisition of natural and organic foods chain Whole Foods Market and its more than 460 stores in the United States, Canada and Britain. Since then, Amazon has continued to advance its supermarket business with an emphasis on ease and speed.
Amazon also is responding to heightened demand for groceries during the pandemic, as Americans spend much more time at home. Restaurants have shuttered or limited their capacity and hours, and with millions of employees working remotely, home cooking has replaced much of what would have been workday lunches at nearby office eateries.
Amazon has increased its capacity to deliver groceries by more than 160 percent, according to its latest earnings report, which captured May, June and July. The company also tripled its online grocery sales compared with the same period last year.
The e-commerce giant already operates more than two dozen Go stores that allow customers to walk in and out without standing in a checkout line, with an array of cameras and sophisticated data-gathering tools tracking a shopper’s behavior. But the Fresh store will differ from the smaller grab-and-go markets. Customers will have the option of using either a “smart” cart or a traditional one and paying at a checkout lane with cashiers. They can also ask Alexa-powered devices for help, such as: “Alexa, where can I find the hot sauce?”
With the new store, Amazon is targeting different customers than those who frequent Whole Foods, which is known for its vast selection of natural and organic products. Fresh stores will have a wide array of national food brands in addition to meat, produce, seafood and prepared foods made on location daily.
“It’s likely Amazon Fresh will directly target the customer base that is in between their Whole Foods brand, which typically caters to more health-conscious and affluent customers, and discount grocery retailers like Aldi and Lidl,” said Gregory Ng, chief executive of digital consulting firm Brooks Bell. “This puts their sights directly on competing with Target and Walmart.”
Amazon has confirmed plans for a handful of other Fresh locations in Southern California and the Chicago area, which it said it will continue to operate and grow alongside its Whole Foods business.
“Obviously, they thought that building something from scratch would be better than to try to retrofit a Whole Foods store, which is what it looks like they are doing here,” said Sucharita Kodali, a retail analyst at Forrester Research. “It also looks like they are looking to experiment with a slew of different technologies like automated shopping carts, a micro-fulfilment center and probably a number of other things we haven’t even learned about yet.”
She added that it wouldn’t be surprising if the store in Southern California is a showcase to try to sell the technology to other companies rather than being the future of an Amazon-branded commerce experience.