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Amazon’s grocery moves – a signal of more to come?

A second Amazon Go Grocery opened in the Seattle area in mid-September.

Three years after Seattle-based Amazon acquired Austin, TX-based Whole Foods Market Inc., it seems that the tech giant is finally moving forward with grocery plans of its own.

This week, Amazon opened a second Amazon Go Grocery location in the Seattle area, and plans were announced for a co-location of an Amazon Fresh grocery in a California Kohls store.

produce with pamela“Right sizing” retail square footage is something that will come up a lot over the next couple of years, I think, as we’re seeing many stores contract floor space or close entirely. Kohls has been looking for a way to co-locate and draw more customers to physical locations for several years now.

The company previously partnered with Batavia, IL-based Aldi Inc., which I thought was a great idea. Kohl’s and Aldi shoppers have a lot in common. Both are intense deal seekers, with Aldi’s “Aisle of Shame” the “Aldi Finds” drawing people in for everything from knock-off home décor to garden tools and exotic foods. Kohls has a loyal following for its coupons and deals as well.

But Amazon has a wider reach, for sure. Kohls has had a deal with Amazon for the past several years to be a hub for online returns, so the companies already have relationship.

The first Amazon Fresh store, which just opened in Woodland Hills, CA, has some notable tech integrations, like Alexa guidance and the Dash cart, but Go Grocery is a completely different beast.

It offers the scan-free, cashier-free experience of the company’s convenience stores, via a matrix of cameras that watch shoppers as they browse aisles and add various items. Fresh produce was a challenge for the company in the first iteration of Amazon Go, which opened in 2018. I’ve been to several of the stores, and was never impressed with the fresh produce.

This new grocery concept is still very much in the concept stage, kicking the tires on offering things like bulk onions and apples. I can’t see it as a widespread, cost-effective grocery expansion, but there are rumors that Whole Foods will offer it in the future, so I could be wrong.

With these new additions, and more Amazon Fresh locations expected to open shortly, I think it’s safe to say we’ll be seeing a lot from Amazon in the grocery sector, very soon.

 

Pamela Riemenschneider is the Retail Editor for Blue Book Services.