Amazon Fresh is coming to Seattle’s Central District

Amazon has been experimenting with groceries for over a decade. In 2007, after dipping its first toes into non-perishable food delivery, Amazon launched a home grocery delivery pilot for affluent residents of Mercer Island, also under the AmazonFresh brand. In six years, this service extended to the Seattle area, then to several cities in California. At the end of 2019, it was available in 19 US cities; now, an Amazon spokesperson says it’s available in most major metropolitan areas and a handful of overseas markets. It’s extremely slow, in Amazon terms. It turns out that delivering fresh food to your doorstep quickly and affordably isn’t easy.

Perhaps that’s why Amazon dove into the world of physical groceries, acquisition of Whole Foods in 2017. Amazon made some changes to the channel, introducing discounts for Prime members, pressing more labor from workers and phasing out a partnership with Instacart in favor of Amazon’s own online ordering and delivery service. But it’s not really a revolution. Whole Foods may have been, first and foremost, how Amazon learned about the industry.

The truly Amazon-like shopping experience arrived in January 2018. That’s when the first Amazon Go convenience store, located in the company’s Day 1 building in South Lake Union, opened to the public. . Come in, go out, no need to check – a dense array of cameras and ceiling sensors track your every move, cataloging the items you select. A smartphone application automatically debits your account. (Under pressureAmazon then introduced a cash payment option.) Two years later, an Amazon Go Grocery open on Capitoline Hill. Same concept but bigger, a real grocery store, but not as big as your average Safeway or QFC. (Amazon has since abandoned the Amazon Go Grocery concept, renaming the Capitol Hill site Amazon Fresh.)

But Amazon’s latest foray into groceries may be its biggest yet. Rather than catering to the affluent, health-conscious liberals or the high-tech crowd, Amazon Fresh is a store for all shoppers. What exactly does Amazon do?

In part, Amazon is seeking to compete with the physical grocery mass market now dominated by chains like Kroger, Albertsons and Walmart. By providing a more or less conventional shopping experience, Amazon can differentiate itself from its competitors while weaving the web that connects customers to Amazon: in-store package pickup and return, Alexa assistance for navigating aisles, and personalized product suggestions and coupons through Amazon’s ever-expanding tool. tons of data about who you are and what you want. In this game, Amazon has another decisive advantage: extremely deep pockets. In an industry with notoriously thin margins, Amazon can undersell at will.

Amazon Fresh stores can, counterintuitively, also offer Amazon in line the grocery store on the upper level. Across the grocery industry, the COVID-19 pandemic has accelerated the shift to online ordering for pickup or delivery. Companies have experimented with several models. There are paid shoppers, whether employed internally or under contract through Instacart. There is “dark storeswhich are not open to the public at all. There is “micro-realization centerssometimes housed in the back of a working grocery store, and there are large automated warehouses. At this game, Amazon is in some ways at a disadvantage, lacking the physical infrastructure in dense urban areas that large grocery chains already enjoy. Amazon Fresh stores will then become bases from which Amazon can improve and grow its online shopping business, although it also caters to in-person shoppers.

Finally, Amazon Fresh is a laboratory for piloting and disseminating new technologies that could ultimately cement Amazon’s dominance in the grocery sector. In most stores, Amazon Fresh shoppers have the option of using a smart”Amazon Dashboard” shopping cart, which uses cameras, sensors and a scale to efficiently perform self-checkout while shopping. (This also, presumably, tracks a customer’s journey through the store, collect valuable data.)

But Amazon doesn’t stop at smart carts. The recently opened Bellevue store features “Just Walk Out” cashierless technology pioneered at Amazon Go, its first use in a full-size store. In April, The Seattle Times reported that a Ballard location with this technology also appears to be in the works. Amazon can now introduce technologies like these into an otherwise normal mass grocery store, allowing customers to gradually become familiar with their use.

One of the fun things about having virtually unlimited resources is that you can afford to try and fail often. If Amazon decides to lay down a lead, or two, or a dozen, the rest of the grocery industry will have to scramble to adapt. The cost-conscious consumer could win in the age of fierce competition that lies ahead. But there will also be losers. Amazon’s new expansion into the grocery business will ripple through the entire food supply chain, with profound implications for workers and communities. Unions, community organizers, elected officials and all of us will have to figure out how to respond.

Correction: An earlier version of this column incorrectly claimed that AmazonFresh, the company’s grocery delivery service, operates in 18 US cities. We’ve corrected the column to clarify that the service works in most major US metropolitan areas.

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