EXCLUSIVE: Inside Amazon’s New Recent Grocery Banner

Three years after acquiring Whole Foods Market, Amazon plans to disrupt the food industry again, this time with innovations that cannot be found in any traditional grocery retailer.

After months of speculation, the Seattle-based company today opened its first standalone supermarket banner: a 35,000-square-foot, digitally-perfected store in Woodland Hills, California called Fresh.

The Fresh banner is not an offshoot of Whole Foods, nor does it look like one of the cashier Amazon Go stores that popped up in urban areas in the US, nor does it look like the 365 banner that Amazon last scrapped Year too.

The new Amazon Fresh supermarket brings together elements of all of these concepts – micro-fulfillment, contactless features, a curated range of premium and conventional products, and highly personalized service – and merges them into an innovative store that caters for every kind of food buyers, from a cash register with little touch to high-touch ready meals prepared to order. This is a store designed to appeal to a shopper who is looking for the best of everything: the best mix of products, the best technology, and the best shopping experience.

“The Amazon Fresh grocery store was designed from the ground up to provide a seamless shopping experience whether customers are shopping in-store or online,” said Jeff Helbling, VP of Amazon Fresh Stores. “We have leveraged our decades of operational experience to deliver consistently low prices for everyone and free same-day delivery for Prime members.”

Amazon announced to Progressive Grocer that the Fresh store is open today to a select group of invited customers in Woodland Hills, part of the greater Los Angeles area, who can purchase the store before it opens to the public in the coming weeks. An exact date will be announced later. The opening times for the new Fresh are daily from 7 a.m. to 10 p.m.

In an exclusive interview, Helbling, who held several high-ranking positions at Amazon, stated that the company had operated the site as a dark business and was now ready to bring Amazon’s representation of the perfect grocery store to the world.

“We have had hundreds of employees offering online grocery delivery from the store in the past two months,” noted Helbling. “I am very proud and humble of the work you have done to serve the community during this difficult time. And we all look forward to opening our doors and expanding our service to the Woodland Hills community.”

Of course, the new Fresh store will have pandemic security measures for the foreseeable future. Helbling said the company drew insights from Whole Foods and applied the same safety measures in Amazon Fresh stores: daily temperature checks for all employees, face covers for all employees and customers who enter the store, and free disposable masks for every customer who does this does want one and run the store with 50% capacity.

RANGE

Consumers who shop at Amazon Fresh will find a wide range of national brands and high quality products, meat and seafood. Although Helbling refused to offer SKU details, he said the range will consist of “all the items you’d expect in a full-service grocery store,” including national, private and local brands. This allows shoppers to find natural products like those from Whole Foods, conventional and local products like those from traditional grocers, and private label products from all of Amazon’s banners, including Amazon and Whole Foods.

In particular, the company is launching at least two new exclusive private labels in Fresh Stores: Fresh and Cursive.

“Our Fresh brand offers excellent value for money for meat, seafood and baked goods. For example, we offer our Fresh brand, natural whole chicken without additional hormones, for 99 cents,” said Helbling. “And our new brand, Cursive, is an exclusive wine brand for Amazon. It offers a range of reds and whites, also with great value. My favorite in this group is our Cursive Rose, which is great for this time of year and was recently approved by James Suckling rated 92. “

Amazon Fresh also offers locally produced and regional products that are put together for each store.

“So we’ll have Groundworks coffee and RokenWagner baked goods in the Woodland Hills Fresh Store,” said Helbling. “And we’ll be offering a selection of local favorites that aren’t typically found in LA, like Duke’s South Carolina mayonnaise and Elleno’s Seattle yogurt.”

An in-house kitchen team offers a daily selection of prepared foods freshly made in-store, from freshly baked bread and made-to-order pizzas to roast chicken and hot sandwiches. Full-service meat and seafood departments join a massive products department that carries many of the Whole Foods branded organic products. A full-service deli section and hot and cold bars are available.

TECHNOLOGY

The store is not 100% cash free, another nod from Amazon as it offers its customers as many options as possible. The Fresh concept offers traditional cash trolleys, traditional cash registers and traditional points of sale (with cash, credit, SNAP, etc.). The new Fresh Store also offers new ways to make grocery shopping more convenient, including the Amazon Dash Cart, which customers can use to skip the checkout, and new Alexa functions, which customers can use to manage their shopping lists and navigate the aisles better can navigate. In the Fresh stores, there are Ask Alexa stations throughout the store so shoppers can find the organic steel oatmeal flour.

Customers using the Dash Cart simply place their bags in the shopping cart, log into the Amazon app with their fresh QR code, shop and leave the Dash Cart lane to automatically complete their payment. The cart uses a combination of computer vision algorithms and sensor fusion to identify items placed in the cart.

“We are happy that customers can try it out,” said Helbling of the Dash car. “I’ve used it as a beta tester for a while now and I use it when I shop in the Woodland Hills store and I love it. I find it very convenient. You just log into the Amazon app, you buy in the store, you go down Dash Cart Lane and that’s it. You skipped the checkout. “

The store also offers same day delivery and collection. Customers can pick up their orders by visiting a customer service desk in the store or by driving to a special pick-up car park. Helbling seemed to suggest that Amazon believes that the American consumer wants to buy groceries online and has both in-store pickup and in-store delivery as fulfillment options.

“We do both,” he said. “Prime members get both for free, and the store will have a number of dedicated roadside pickup locations just outside the store.”

Amazon Fresh Stores also offer Amazon.com package pickups and free package-free product returns.

LOW PRICES

Helbling emphasized that this tireless focus on customer wishes and needs, which is seamlessly satisfied, will not come at a high price for buyers.

“We have used our decades of operating experience to deliver consistently low prices for everyone,” he said. “When customers visit the store, they can find affordable prices for a range of national brands, quality products, meats and seafood. For example, a 3-pound bag of onions for $ 1.69 and a box of 10 Quaker Oatmeal (all ) Flavors) for $ 2.50. “

In addition, Amazon Fresh customers get 5% back when they use their Amazon Prime Rewards Visa Signature Card or Amazon Prime Store Card at checkout.

EXTENSION

According to Helbling, the company will open additional Fresh stores in the Los Angeles and Chicago regions. Many more are sure to come.

“We currently have online grocery deliveries from Woodland Hills, Irvine and Northridge,” said Helbling. “We also announced that we would soon be opening a Fresh store in North Hollywood. And in Chicago, we operate online grocery delivery from our Naperville store, and we have announced that we will be opening.” in Oak Lawn and Schaumburg. “

Amazon’s new concept of Fresh opens a month after the company reported sales that beat all estimates for the second quarter. This shows that shoppers continued to turn to the online giant during the COVID-19 pandemic. Amazon’s net revenue increased 40% to $ 88.9 billion in the second quarter, compared to $ 63.4 billion in the second quarter of 2019.

The sale of groceries was also a bright spot during this period. Amazon increased grocery delivery capacity by more than 160% and tripled grocery pick-up locations to help customers avoid shopping in stores during COVID-19. The result was that grocery sales tripled in the second quarter compared to the same period last year.

However, Amazon’s physical store revenue declined 13% to $ 3.774 billion, compared to $ 4.330 billion in Q2 2019. Part of the decrease may be due to how Amazon reports physical store revenue. Unlike other retailers, Amazon’s physical sales only reflect sales where customers physically select items in a store. Orders placed online at Whole Foods Market, either for roadside pickup or delivery, are classified as online sales. The approach is the opposite of the way retailers like Kroger, Walmart, or Albertsons handle digital sales and tends to obscure Whole Foods’ real performance, especially as more shoppers choose digital fulfillment methods.

As for why Amazon is opening a physical store when so much of the demand for groceries is shifting online, Helbling said the short answer is to give customers the choice.

“You know, we are sure to find that online shopping, as you know, is happening during the pandemic,” he continued, “but a lot of customers still prefer to shop in a physical grocery store either all or most of the time Business. And so we invest in online and we invest in business. This business is kind of a manifestation of that. And that’s why we do it. We want to give our customers a choice. “

According to media reports, Amazon is also planning grocery stores in the Los Angeles and Philadelphia markets on the PG 100, the 2020 Progressive Grocer list of the leading groceries and consumables retailers in North America. Whole Foods, based in Austin, Texas, is number 24 on the list.

A detailed look at the Woodland Hills Fresh Store can be found below.