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Amazon grocery store

February 21, 2020

Report: Amazon’s Grocery Store Will Have Robotic Fulfillment

When Bloomberg surfaced a report last week giving us a first-look inside Amazon’s new grocery store, we were struck by how conventional it was, especially when it came to automation and robotics. But a report from the HNGRY blog this week says that actually, the Amazon grocery store will have robot-powered micro-fulfillment.

From HNGRY’s story:

HNGRY has now confirmed that Amazon is working with Dematic to provide this very technology inside of its new stores, which will ultimately enable faster than average last-mile delivery and in-store pickup. The company has carefully designed this 7,200 sqft area to house room-temperature robotic-picked storage aisles that will house everything from alcohol to packaged food, occupying about 21% of its 33,574 sqft total footprint.

If HNGRY’s reporting is accurate, this actually makes more sense than Bloomberg’s report in a lot of ways. First, Amazon loves robots. It bought robotics company Kiva Systems a long time ago for automating Amazon warehouses. And Amazon is building a big new, dedicated robotics center near Boston.

But it also makes sense from a competitive standpoint. Automated order fulfillment can translate into faster turnaround for grocery pickup or delivery. Already, Walmart is working with Alert Innovation on robot micro-fulfillment, and Albertsons has partnered with Takeoff Technologies.

It would be highly unlikely that Amazon, which prizes speed and efficiency above all else, would cede this type of advantage to its competitors. Amazon offers two-hour delivery for Prime members and waived the delivery fee for Prime members towards the end of last year.

Amazon is also seeing growth in its grocery delivery business. In its most recent earnings report, Amazon said that delivery orders from Amazon Fresh and Whole Foods doubled year-over-year in Q4 of 2019.

HNGRY’s report is reassuring, in a way. I was worried Amazon’s supermarket was shaping up to be a bit of a bore. But it’s likely the company still has a few more technological surprises in store.

February 13, 2020

Report: Amazon’s New Supermarket Looks Super Conventional, So Far

You might think a grocery store built by Amazon, which has a history of radically re-thinking existing business processes, would be radically different (instead of shelves, just rows of Star Trek-like replicators, perhaps). But Bloomberg got their hands on some plans and photos from inside the yet-to-open Amazon supermarket, and it looks… like pretty much like a regular ‘ole grocery store.

The first of three LA-area Amazon grocery stores is supposed to open next month in Woodland Hills, CA. Bloomberg writes that the 33,000 sq. ft. facility features a meat and seafood section as well as a “Fresh Kitchen” for making prepared foods. But in addition to these regular features, there are a couple of bits of Amazon flair.

First, the store will be equipped with digital tags, similar to the ones used in Amazon’s 4 Star stores, which can change prices and indicated different inventory on a shelf.

There is also a window dedicated to grocery pick up orders and returns. As Bloomberg writes:

Plans show a staging area behind the window with what appears to be shelving, potentially for order pickups from both customers and delivery service providers, who will shuttle orders to people’s homes. A television display and whiteboard sit alongside the return counter, likely to help orchestrate the chaos of deliveries into and out of the store.

Last fall, Amazon waived the fee for one- and two-hour grocery delivery for its Prime members (of which there are 150 million globally). That move seems to have helped spark a surge in deliveries as Amazon reported in its most recent earnings that grocery delivery orders from Whole Foods and Amazon Fresh doubled in its fourth quarter year-over-year.

Equally interesting in Bloomberg’s report is what appears to be missing from Amazon’s grocery store. Amazon has said before that the store won’t feature cashierless checkout a la Amazon Go. But from what Bloomberg describes, the store also won’t feature a back-of-house, robot-powered micro-fulfillment center to speed up online grocery orders either.

One big grain of salt with all this is that Bloomberg is only reporting on the plans and photos it’s seen. There could be a lot more to come that Amazon is being tight-lipped about. Additionally, this is just the first store for Amazon. Perhaps it didn’t want to frighten away potential shoppers with too much tech. With omnichannel grocery shopping valued at more than $1 trillion in the US, it’s safe to assume Amazon is playing the long game and has plenty of time to make buying food radically different.

November 11, 2019

Amazon Confirms Grocery Store, but Questions Remain

After months of speculation, CNET confirmed this morning that Amazon is indeed getting into the grocery store game. Despite this confirmation, however, many questions remain.

Here’s what CNET discovered so far:

  • The first Amazon grocery store will be in Woodland Hills, CA near Los Angeles
  • It is opening in 2020
  • This store is different from Whole Foods
  • The store won’t use Amazon Go’s cashierless checkout tech, so you’ll have to wait in lines

We don’t know what name the store will have, or what the selection and pricing will be, or if there are more stores on the way. Earlier reports have suggested that this Amazon store could carry the types of items that Whole Foods doesn’t (e.g. a can of Coke or a box of Twinkies).

Amazon’s bid to build its own grocery stores comes at a time when it is aggressively battling the likes of Walmart, Target and Kroger for a larger piece of the $800 billion dollar US grocery market. According to earlier research, Amazon already leads its competitors in online grocery shopping, but most of that is through Amazon proper, not its Amazon Fresh grocery brand, and those shoppers tend to spend less than shoppers spend at Walmart.com.

Last month, Amazon made delivery of online grocery orders free for all of its Prime Members, and the addition of its own line of groceries stores would give the company more options for customers like curbside pickup.

But right now, online grocery shopping remains a small percentage of overall grocery spending, as people still like to look and touch produce and proteins before they purchase. Having a real world retail store would give Amazon tons of data and insights about who shops and when, how they move through a store, what they buy, what they don’t buy etc. All of this can be leveraged by its already massive retail platform to get you to ultimately buy more, buy more groceries online, and buy more groceries from Amazon.

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