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AP Photo/Ted S. Warren

Amazon opens cashierless grocery store

AP Photo/Ted S. Warren

AP Photo/Ted S. Warren

Amazon is aiming to kill the supermarket checkout line.

The online retailing giant is opening its first cashierless supermarket, the latest sign that Amazon is serious about shaking up the $800 billion grocery industry.

At the new store in Seattle, shoppers can grab milk or eggs and walk out without checking out or opening their wallets. Shoppers scan a smartphone app to enter the store. Cameras and sensors track what’s taken off shelves. Items are charged to an Amazon account after leaving.

Called Amazon Go Grocery, the new store is an expansion of its 2-year-old chain of Amazon Go convenience stores. At 10,400 sq. ft., the supermarket is more than five times the size of the smaller stores, and stocks more items beyond the sodas and sandwiches found at Amazon Go. The new market stocks fresh baked bread, blood oranges, butternut squash and other food to whip up dinner or stock the fridge.

Amazon is not new to groceries. It made a splash in 2017 when it bought Whole Foods and its 500 stores. It’s also been expanding its online grocery delivery service. But it’s still far behind rival Walmart, the nation’s largest grocer, which has more than 4,700 stores. Walmart has also found success with its online grocery service, that lets shoppers buy online and then pickup at stores.

Amazon plans to open another type of grocery store in Los Angeles sometime this year, but the company said it won’t use the cashier-less technology at that location and has kept other details under wraps.

At the new Seattle store, families can shop together with just one phone scanning everyone in. Anything they grab from the shelf will be added to the tab of the person who signed them in. But shopper’s shouldn’t help a stranger reach something from the top shelf: Amazon warns that grabbing an item for someone else means you’ll be charged for it.

While cashierless stores remove a major annoyance for customers, waiting in long lines to pay, it also takes away parts of supermarket shopping that some customers may miss. There’s no one to bag groceries at Amazon Go Grocery. Instead, Amazon gives out reusable bags so shoppers can fill them as they shop. And there’s no deli counter, butcher or fishmonger. Instead, packaged sliced ham, steaks and salmon fillets are sold in refrigerated shelves.

Other retailers and startups have been racing to create similar cashier-less technology. Earlier this month, for example, 7-Eleven said it is testing a cashierless store inside its Irving, Texas, offices.

Amazon declined to say if it plans to open more cashierless grocery stores. Since it launched its first Amazon Go store in 2018, the Seattle-based company has opened about 25 of them in big cities, such as Chicago, New York and San Francisco.


Amazon-Go-walking-in_500-x-400

Amazon Go expands foodservice offerings

Amazon-Go-walking-in_500-x-400Amazon is to sell to hot food and espresso at select Amazon Go locations in the United States.

Its store in San Francisco’s Financial District is closed for renovations, as the company prepares to expand its foodservice offering beyond grab-and-go options, according to The San Francisco Chronicle.

It appears Amazon is rolling out new offerings at other locations, too. One of its Chicago sites is also closed for renovations. According to its website: “This Amazon Go location will be temporarily closed for renovation. We’ll be back with new features and flavors in the Spring.”

Amazon Go operates 25 locations in major urban centres, including New York, Chicago, Seattle and San Francisco. Another is slated to open soon in Seattle.

When it introduced the concept, Amazon laid out ambitious plans, targeting 3,000 Amazon Go convenience stores by 2021.


Riding the wave of convenience: Amazon Go reflects broader market forces

When Amazon purchased Whole Foods, a collective shudder could be felt from grocers across North America. The online behemoth was making its intentions known by entering the grocery space. While the acquisition received a great deal of media attention at the time, the greater disruption may end up being the launch of its Amazon Go concept store in Seattle at the beginning of 2018.

Amazon Go’s cashierless model showcases a revolutionary shopping experience. No need to wait in line to pay; shoppers can grab what they want from the shelf and just walk out. The purchase is recorded on the Amazon Go app by syncing with sensors located throughout the store. Those who have shopped there have reported that it’s so seamless it feels as though they are shoplifting. Amazon is reported to have plans to expand Amazon Go’s presence, scaling up the number of locations to 3,000 by 2021.

Amazon Go’s arrival is a reflection of broader market forces that will increasingly impact the grocery space as the expectation for easier and more curated in-store experiences grow. As Netflix changed the media landscape making traditional television seem increasingly like a relic, grocers need to be wary of experiencing a similar fate.

The integration of technology with the shopping experience proves particularly important to Generation Z. Representing the emerging shopper base, consumer feedback collected for Mintel’s recently published Grocery Retailing in Canada report shows young adults are more likely to cite interest in a shopping experience that is quicker and easier. Furthermore, technology is shown to play a particularly important role in achieving these outcomes for younger consumers according to earlier Mintel reports.

An added benefit of greater integration of personal technology can be found in either reducing labour costs or by reallocating labour to more value-added functions within the store. This can include giving shoppers more personalized attention when they have questions or staffing-up in other departments to provide more fresh, prepared items—an area where grocers often realize higher margins on a per-purchase basis.

U.S. grocery chain Albertsons’ recent agreement with Microsoft to leverage its cloud-based expertise shows that the race is on to create more technologically-integrated, in-store shopping experiences. In the Albertsons example, the grocer has been testing “Amazon Go-like” technology providing cashier-free shopping. The partnership with Microsoft could provide critical expertise in scaling up such technology. Other retailers, such as Walmart here in Canada and Marks & Spencer in the United Kingdom, are also investing using scan-and-go technology that allows consumers to make purchases in under a minute.

So, what’s next? While difficult to predict, it may involve the grocery store becoming more mobile. U.S.-based startup Robomart plans to bring groceries, baked goods and prepared foods to the customer’s door via self-driving vehicles. This envisions a future where the phone is at the centre of more streamlined shopping experience, both in and out of the grocery store.

Despite online shopping’s rise, brick and mortar grocery stores aren’t going away. That said, a growing reliance on personal technology means grocers will need to invest in evolving the tools they offer to provide shoppers with a more convenient, informed experience.

Originally published in Canadian Grocer’s March/April 2019 issue.