Friday, May 19, 2023

Amazon’s Food Data Points Point to Missteps


When you are one of the world’s largest retailers and own a chain of grocery stores the amount of ‘high-level’ data points on food, fresh foods, and food products should provide insights that would empower success. 

It’s at the intersection of Intelligent Quotient (IQ) and Emotional Quotient (EQ) that interpreting that ‘high-level’ data seems to have taken some missteps according to Steven Johnson Grocerant Guru® at Tacoma, WA based Foodservice Solutions® who stated, “legacy channel managers tend to see a channel with rose colored glasses half-full. They believe that the ‘grass is greener on the other side of the fence’ all the while not evolving with consumers thinking no matter how much data they have that they still know best.”

Johnson continued, that sounds simplistic while the customer is dynamic not static all food retailers must strive to evolve with consumers.  The fact is the grass may appear greener on the other side of the fence but as Johnson reminds us it is the pasture that pay’s the bills over time.  Don’t let the quantity of data become more valuable that quality of the data you review.

So, let’s look at what could be viewed by some as missteps. Over all food retailers are doing a pretty good job in the e-grocery space, according to the group that arguably matters the most: consumers. A new study from The Feedback Group found that traditional grocery stores rank highest for online food shopping satisfaction, topping e-comm giant Amazon and mass merchandiser sites.

According to that research, grocers came in with an overall satisfaction rating of 4.40/5.0. Amazon scored a 4.30 and mass merchandisers including Walmart and Target netted a 4.26 score.

Yes, there are maybe more missteps in reading data, it has been reported that a half dozen of the yet-to-open grocery stores are listed for sublease in the Twin Cities area, as well as a couple of locations in Detroit.  So, just who is doing the subleases? Several news reports that half a dozen of the yet-to-be-open grocery stores in the Minneapolis-Saint Paul metro area are now available for sublease are being subleased by Amazon.  

However, representatives for both Amazon declined to comment or confirm the report.  According to Business Insider, analysts at Bernstein have put together a comeback strategy for Amazon in grocery and the main component is purchasing existing stores that are on the chopping block due to the proposed Kroger, Albertsons merger.

The grocers are expected to shed up to 500 stores, and many are in areas that could be favorable for Amazon. The price to acquire is another selling point. Bernstein analysts also are proposing that Amazon quickly rebrand stores or focus on stores in targeted regions. 

However, the waters continue to be rough. As noted earlier, Amazon has put a pause on constructing or opening brick-and-mortar grocery stores, and in Minneapolis the company announced it will be sub-leasing space that was originally marked as Amazon Fresh or Amazon Go stores. In addition, Whole Foods announced layoffs in April while Amazon restructures the organization.

You might have missed some of this, the news about the multiple subleases and the Whole Foods restructuring comes after Amazon CEO Andy Jassy confirmed that the company is still pursuing a grocery business but taking the time to hone the concept for the most effective model. "We have a set of experiments and concepts that we are working on across the dozens of stores and are pretty optimistic that some may work and hopeful that over the next year we find that,” he said during the company’s quarterly earnings call in early May.

Regular readers of this blog know that Amazon Go missed the mark with the Mill Valley, WA store. First the location is a secondary site at best. 

Once again, it is at the intersection Intellectual Quotient (IQ) and Emotional Quotient (EQ) the data from Amazons IQ overwhelmed the customer focused touchpoints of EQ.  While the store is in up-scale Mill Valley a C-store customer is still a C-store customer.  Someone at Amazon Go does not understand the mind-set of that customer yet.

Amazon has the right products, wrong pricing, sizing, and placement within the store.  Lost in the shuffle of attempting to do too much is the fresh food, aka made to order meals and meal components. Great flavor, slow service, menu of yesterday’s entrée’s not todays. 

Are you ready for some fresh ideations? Do your food marketing ideas look more like yesterday than tomorrow? Interested in learning how our Grocerant Guru® can edify your retail food brand while creating a platform for consumer convenient meal participationdifferentiation, and individualization?  Email us at: or visit: us on our social media sites by clicking one of the following links: Facebook,  LinkedIn, or Twitter

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