Amazon Hoping “Smart” Grocery Stores Will Catch On
Technological updates have been a part of grocery shopping since the first “electric eye” doors were installed in the first half of the 20th century. As technology continues to advance, basic chores like going to the grocery store are starting to look very different than they did in previous generations. From self-checkout to cashless transactions, modern shoppers are doing things much differently than their parents and grandparents.
While some shoppers are balking at the updates, missing what it used to feel like to make a “trip to the grocery,” Amazon is going after those who love the tech updates, hoping they’re all-in on trusting their technology to guide your shopping experience.
Amazon recently debuted a new kind of grocery store, in which patrons can use the Alexa digital assistant to locate items in the store and even scan and check out their groceries in the shopping cart.
The first of these prototype Amazon Fresh stores are scheduled to open in Woodland Hills, California, a suburb of Los Angeles. Amazon says this store will be aimed at a different clientele than its other grocery brand, Whole Foods, which Amazon bought for about $13.7 billion a few years ago. While Whole Foods specializes in natural or organic products, it also doesn’t carry popular product brands, including Coca-Cola and Tide. Clearly, Amazon is looking to branch out, offering this statement from VP of Amazon Fresh Stores, Jeff Helbling:
“Grocery is a very large consumer sector. By most measures, it’s $800 billion in the US… Collectively, we’re relatively small in this space.”
As anyone who has watched Amazon’s rise over the years can say, the one thing the company does not do is “stay small.” While the current grocery market share is about 4% for Amazon, compared to about 21% for Walmart, the company’s new endeavors could help them expand their footprint. That will begin when Amazon cuts the ribbon on seven of the new Amazon Fresh locations, four in California and three in Illinois.
While getting more market share and clout in the grocery sector is definitely one of the company’s goals, this option will also allow Amazon to expand its Amazon private label line and gather more data on shoppers.
However, if the past and current business practice is any indication, Amazon’s deliverables will be more than enough for customers to enjoy without giving much thought to how the company is profiting off the benefits they receive. That “deliver big and collect quietly” approach has been working very well for Amazon since the very beginning, and it appears that their customer base is more than happy with that arrangement.
However, it’s likely that there will be some concerns voiced about security and data collection as more of these stores debut, and more customers are finding them. Amazon should have messaging in place – and they likely do – to respond to these questions when they come.