Analysis: Amazon reportedly to launch grocery store business

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Analysis: Amazon reportedly to launch grocery store business

By CSA Staff - 03/04/2019
"The reports that Amazon is pursuing a more aggressive entrance into brick-and-mortar grocery retail aren’t necessarily a huge surprise. Rather, it would be in line with the company’s growing investments in recent years in physical locations, including acquiring Whole Foods Market, launching Amazon Go convenience stores and expanding package pick-up locations.

Amazon grocery stores that don’t fall under the Whole Foods banner would likely reach a different consumer segment, broadening Amazon’s reach into the American grocery landscape. Amazon’s forays into online grocery sales so far have yielded mixed results, and traditional grocery retailers like Kroger have significantly stepped up their own investments in e-commerce.

If these reports are accurate and Amazon moves forwards with opening these additional stores, it would lend further credence to the idea that well-designed, well-located brick-and-mortar stores have an important role to play in the years ahead, even as e-commerce continues to grow.” --Amanda Bourlier, consultant at Euromonitor International

 

"I would speculate this is a traditional grocery play that leverages the best of Amazon technology and shopper insight. As amazon continues to look for ways to capture the last mile through physical retail, they need to test find propositions that speak to different shopper segments. Whole Foods Market is a relatively narrow proposition, Amazon Go is small footprint and Amazon Fresh is delivery only. A more traditional grocery play would cover critical gaps in their current model.

There will undoubtedly be some sort of acquisitions (likely regional grocers to avoid anti-trust issues) to help accelerate the expansion plan as that is often one of their paths forward. I would speculate heavy private label play here and while it may not have Go just walk out technology on day 1 for a larger store footprint, it may likely have the Amazon Books’ easy mobile app payment capability.

This would also help Amazon drive penetration and frequency of Amazon payment options and credit/store cards."-- Danny Silverman, CMO, Edge by Ascential

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