Value and convenience lead the way as Amazon leans toward grocery stores – Grocery Dive


The trends identified by InMarket’s report indicate Amazon’s emphasis on speed, convenience and price in its growing chain of Fresh stores is resonating with shoppers as roaring inflation drives up food costs.
Amazon Fresh stores stock a wide assortment of items aimed at cost-conscious shoppers and are home to an array of products sporting Amazon’s own brands, including Aplenty, a broad-based line of center store products announced last April. That mix, along with the selection of conventional products from national and local brands Amazon Fresh stores stock, appears to be standing out with consumers looking to hold down their grocery bills.
Not only was the level of shoppers visiting Amazon Fresh stores up substantially in Q4, but the number of new visitors rose 65%, implying that shoppers are gravitating toward the rising number of stores in the chain, which started with a single Los Angeles-area store that opened in August 2020.
Data released late last year by Placer.ai also found that shoppers were building visits to Amazon Fresh stores into their shopping patterns. In addition, a February report from Placer noted that visits to eight Amazon Fresh locations grew between the second and fourth quarters of last year, another sign that the chain is catching on with customers.
Whole Foods, on the other hand, has recently had trouble attracting shoppers, particularly people looking to fill their carts with groceries instead of just buying a handful of items, InMarket’s findings suggest. The chain saw an 11% increase in what the research company calls unique visitors during Q4 even as overall foot traffic went down, but InMarket attributed that growth to people who bought a few things at Whole Foods while directing most of their grocery shopping to stores where prices tend to be lower.
The amount of time Amazon Fresh customers spent in the chain’s locations fell 29% during Q4 of 2021 compared with the same quarter in 2020, a decrease InMarket connected with Amazon’s efforts to make it easy for shoppers to get in and out of the chain’s stores. Amazon offers Fresh shoppers the ability to use smart carts to avoid the checkout counter, and has installed its Just Walk Out technology in some Fresh stores.
Amazon is also bringing Just Walk Out to Whole Foods, and recently debuted the first location in the chain equipped with the computer vision-based system in Washington, D.C.
Whole Foods runs about 500 stores, making it a much larger operation than Amazon Fresh, which currently counts 25 stores in six states and the District of Columbia, according to the chain’s website.
Amazon’s decision to shutter its book and general merchandise-focused stores and instead focus on grocery reflects the chain’s willingness to experiment with concepts and quickly abandon them if they don’t meet its expectations, Neil Saunders, managing director of GlobalData Retail, said in comments sent by email following word about the closures. 
“While it is unusual for most retailers to abandon concepts in a wholesale fashion – especially outside of bankruptcy – Amazon is not a typical retailer. It tries and tests things new things, often committing reasonable levels of investment, only to move on if it doesn’t see forward potential,” Saunder said, adding that the stores that are going away “lacked a real purpose.”
In addition to focusing on Whole Foods and Amazon Fresh going forward, the retailer also plans to invest in its Go convenience stores and newly announced line of clothing stores, known as Amazon Style.
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Labor and inflation challenges will test retailers this year, but experts also see opportunities like new e-commerce services, more personalized offerings and a booming digital ads space.
Grocers are trying to tailor their health and wellness products and services to an increasingly omnichannel industry.
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Labor and inflation challenges will test retailers this year, but experts also see opportunities like new e-commerce services, more personalized offerings and a booming digital ads space.
Grocers are trying to tailor their health and wellness products and services to an increasingly omnichannel industry.
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