Amazon Enters The Grocery Mass-Market with Its Fresh Store
Amazon has launched its Fresh grocery store in Los Angeles. Anyone been yet?
What their launch tells me about their plans:
The fact that they launched in LA and not Seattle generally means it's ready to scale. This is not a pilot. You don't like to screw up your biggest market unless you are (finally) ready to expand.
The fact that the "walk out" technology is not based on computer vision in the aisles but on the Amazon dash cart itself, reminds me that Amazon is not about gimmicks. It is about iteration. Keep this in mind when you scoff at their drones. It's an approach that could fail. But the approach has a reason, a goal.
It was obvious vision wasn't going to work BY ITSELF in a huge store soon. Maybe later.
Amazon Fresh is at a different price point than Whole Foods. This is Amazon's foray into the mass-market. I somewhat doubt they will open new Whole Foods stores. The Head of Grocery even said they saw them side by side.
The real magic of Amazon grocery is the connections to Prime, technology convenience, pickup, and delivery. Will Walmart and Kroger be able to iterate as quickly? Amazon is betting no.
Gregg London noted on my second point above, regarding the smart cart technology that “The Amazon Dash Cart is - decidedly - "low tech"...relying on Bar Code Scanners and an Integrated Scale (for Produce). In point of fact, the Cart Technology is NOT new or unique...Stop and Shop created the Shopping Buddy, which became the Cart Companion, back in 2005. The Technology that IS "emerging", is the use of Dematic's Micro Fulfillment Center in the back of the Store, for Delivery and BOPIS. Funny, Amazon should actually be thanking Walmart for it's continuing reliance on Self Checkout. Customers are getting quite accustomed to Bar Code Scanners, PLU Lookup and Scales, etc.”
Dan Bourgault added that the reason this is so major is that it’s all-encompassing. He said “This is not just grocery, it is all retail in one spot. Pick up and delivery and returns for grocery and everything else you buy from Amazon. They have the most dominant loyalty program in Prime. No one can touch their last mile solution, including the last two retailers you mentioned. But they have to try or competitor isn’t a word that can be used next to Amazon.”
I am eagerly looking forward to watching this unfold in other markets (looks like Chicago is next).
