Sometimes in business when a company has its pulse on relevant consumer touchpoints hands on experience and intellect combine to create a sustainable retail food store according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.
Even grocery store research legend Bill Bishop, Brick Meets Click co-founder and chief architect stated Amazon Fresh is ‘built to outlast’ other grocery retailers. Regular readers of this blog know that consumers are dynamic not static. That said, consumers don’t want different they want familiar but with a twist. That is a key distinction that the team at Amazon understands and has incorporated within Amazon Fresh.
Amazon Fresh looks like a conventional grocery store, however it is edified with the attributes that consumers have indicated they want. They want item / product selection choice but not overload. The don’t want a choice of ketchup, not a never-ending selection of ketchup. That never-ending selection simply drives the consumer into choice overload. The pardox of choice takes up too much time, in the mind of the consumer, and the consumers does not like how long they are in the store now. Amazon knows that, offers choice but not choice overload.
With a smaller footprint, and ending the choice over load. Bishop continued saying “These Amazon Fresh stores should be able to maintain profitability as margins compress and sales volumes fall, which is a key to survival,” Amazon Fresh stores were built too evolve not stay the same. They will evolve with new products, new faster checkout technology, AI replenishing, customer relevant co-branded messaging according to Johnson.
Amazon Fresh has integrated grocerant niche Ready-2-Eat and Heat-N-Eat fresh prepared foods its meat, seafood and deli departments all offer fresh prepared items. Yes, there is also grab-and-go pizza. Bishop believes that the undercurrent of success will be technology stating “Amazon Fresh is a digitally integrated grocery store, merchandised for today’s customers, that provides a seamless shopping experience. Its low break-even sales volume means that it can operate profitably in intensely competitive markets.”
Amazon ability to leverage AI technology to drive discovery / “surprise and delight” with its product assortment also will enable Amazon Fresh to challenge legacy grocery stores that look more like yesterday and take more time to get in and out of than consumers want to spend.
Integrating consumer interactive participatory items, the ilk of the ‘The Dash Cart’ which saves time checking out, helps you find an item on your shopping list and also provides navigation guidance. The Dash Cart ties Amazon Go and Amazon Fresh with just walk out technology, it empowers customers to shop, and when they are done shopping, leave the store without having to stop to pay.
Bishop reiterated so I want to as well, “The store’s unit economics allow Amazon to operate profitably even in extremely competitive environments,” … “As competition increases (as it inevitably will) and margins are pushed down, many competitive stores will no longer be economically viable and eventually need to close,”. “This is where the low break-even of Amazon Fresh will make a big difference.”
Foodservice Solutions® team is here to help you drive top line sales and bottom-line profits. Are you looking a customer ahead? Visit GrocerantGuru.com for more information or contact: Steve@FoodserviceSolutions.us Remember success does leave clues and we just may the clue you need to propel your continued success.