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What can the UK Grocery Market Learn from Amazon’s Latest Grocery Store Concept?

Charlotte Malbasa, Client Development Manager, at Threefold comments on the latest news and trends within the world of retail.

Charlotte Malbasa Written by Charlotte Malbasa on 21 Feb, 2020

Innovation. Change. Newness. Do things differently. Think differently. Here to Create.

These are all derivatives of the same thing… An opportunity to consider how something might have been done and switch it up.

And, we’re in an age where so much change has taken place over the last 15 years that, not only is it infectious, it’s had a profound impact on all walks of life. If we take grocery in the retail industry as an example, we know that grocers are adapting everything from store layouts, checkouts, packaging, even product ranges and concessions to move with the 2020 and beyond flow.

But, what if all the buzz was actually just that? A buzz.

What if, to succeed in grocery, you just need to do grocery?

Amazon is a retailer I always turn to with eager anticipation to hear what they’re doing next. And there is no doubt that when they purchased Whole Foods in 2017, a shudder ran down the spine of the biggest grocery retailers across the globe.

After all, they’d disrupted the eCommerce industry, what next? What did this mean for grocery as we knew it?

Well, nearly three years on, it doesn’t appear to have meant that much. Amazon have not pulled off a brick and mortar miracle with Q4 Whole Foods sales having declined by 1% to $4.36bn.

But despite this, when I heard the announcement that a series of photos from a mall in LA had been inadvertently released (which you can view here), showing me what Amazon’s new chain of grocery stores are due to look like before opening in the US later this year, I was still really excited. After all, the intention isn’t for them to be another Whole Foods chain. It’s actually another opportunity to stock more brands than Whole Foods ever could… Or would. All the while, appealing to a different type of shopper.

So, what do the pictures tell us? What innovative and different things have Amazon done to their new concept store in LA that will forever change the way we shop grocery across the world?!

To sum up… not an awful lot.

It’s really quite conventional. It has shelves. It has a kitchen for fresh food. It won’t be cashierless in the same way as its Go convenience stores.

There’s an ounce of digital via the shelves carrying digital tags that will no doubt help both shoppers and employees to understand pricing changes and inventory levels. But, it doesn’t appear to be the mixed format store we’d perhaps expected whereby shoppers would order non-perishables before getting to the store, and then handpicking fresh items when reaching store, only for their total shopping cart to be waiting for them at the checkout.

The only real Amazon touch comes in the form of a staging area close to the door, which we can assume is an area for order collection from both customers and delivery service providers.

Understanding that amidst years of consideration on how to enter the colossal global grocery market, Amazon have decided to stay true to traditional forms of grocery as we know it, should tell us that shoppers aren’t yet ready for swathes of change. Yet. And in grocery, they might never be ready. After all, do they need to be?

Stepping outside of the grocery market, presents the turnaround seen by Waterstones in the UK. Announcing that their pre-tax profits for the full year up to April 27 2019 came in at £27.7m, up by 39% on the previous year, highlights that change in the retail industry should perhaps be a step backwards to consolidate what you do, do. And do it really well. If that’s physical books, it’s an environment for books. If it’s grocery, it’s grocery.

Grocers can choose to stock everything if they want to; a one-stop shop for food, toys, beauty, home etc.. But, is what Amazon are showing with their conventional store layout, that shoppers are only really interested in getting what they need and getting it home quickly? Are the parameters of grocery and convenience instead becoming more blurred? And is that the change we want to expect in the next ten years, rather than a robot that helps you to reach the top shelf?

After all, I don’t really need a robot. But I do need to get in and get out quickly while food shopping. I’d just rather be doing something else than a food shop.