Amazon continues retail disruption with launch of Amazon Fresh

Amazon is continuing its disruption of the retail landscape, this time with a move on to the actual high street, with the launch of its cashier-less Amazon Fresh convenience stores.

Last week Amazon opened its second physical Amazon Fresh store in London, next to Wembley Stadium (Project ID: 21117911) on Wembley Park Boulevard. The store opened just two weeks after the launch of its first store, outside Ealing Broadway shopping centre (Project ID: 20316981), in West London.

Just Walk Out technology

Both stores feature Amazon’s ‘Just Walk Out’ technology which allows customers to scan their Amazon app on arrival, fill their bags with products and then leave without any interaction with staff or even a self-checkout machine. The customers’ app is then charged automatically for any items they walk out with.

Amazon describes Amazon Fresh as a “convenience grocery store,” which not only sells everything you’d expect from a convenience store, but also Amazon devices, and a store cupboard aisle features Amazon’s own-label essentials.

Linking on and offline

The stores also provide a closed-link between on and offline purchase and returns, providing a pick-up and return point for orders made on Amazon.com. Returned products don’t require any postal packaging or even a label.

Rise in local and frictionless shopping

Two openings in two weeks suggests the beginning of a concerted campaign to take advantage of the rise in local and convenience consumer shopping that started in the peak of the first national lockdown last year and is continuing according to Barclaycard. Figures reported by Barclaycard released this month show that spend in food and drink specialist stores reached a record high of 63.3% growth in February this year.

With a focus on a frictionless experience and traffic light systems at entrances to reduce numbers of shoppers in store, Amazon Fresh also seems to be latching on to consumer sentiment regarding reducing human interactions in store, as well as the rise in convenience as consumers shop more locally.

However, Amazon’s continued move to physical stores doesn’t just give them a presence on the high street, the move also allows them to integrate online and offline, which has been part of their omnichannel strategy since 2018. With its logistics, existing customer relationships and broad product offering, Amazon Fresh stores have the potential to act as hubs for speedy urban deliveries and grocery pick-ups. This will undoubtedly be cause for concern for established high street retailers who are generally making a loss on local deliveries.

Growing estate

The new stores appear to open up overnight with little evidence that the new outlets will be an Amazon Fresh until the doors are just about to open. And Amazon seems to want to keep imminent openings and future plans for their physical estate close to their chest, with applications often undertaken using a pseudonym.

Through analysis of our planning data and the pseudonyms Amazon is using for Amazon Fresh stores, we’ve identified five further sites due to open by the end of the year and early next year. The sites, all in London so far, are located in Chalk Farm (Project ID: 20198329), Hackney (Project ID: 20479308), Notting Hill (Project ID: 20136162), Islington (Project ID:20216384) and East Sheen (Project ID: 20443075), although Amazon have said that they are planning to open more stores in residential areas across the UK.

Disruption becoming the norm

Amazon’s frictionless shopping model isn’t a new one on UK high streets however, as Tesco, Sainsbury’s and the Co-Op have also been trialling ways to eliminate in store contact, but Amazon has, as ever, taken the lead, and with up to thirty more Amazon Fresh stores due to arrive on our high streets soon, and the fact that Amazon is selling it’s Just Walk Out technology to other retailers, it looks likely that Amazon's disruption will become relatively commonplace soon.

Glenigan customers can see the detail and locations of new Amazon Fresh stores if part of their subscription.

Not a Glenigan customer but would like to take advantage of this insight? Please request a free demo where we can show you future Amazon real estate plans as well as all other current and planned retail opportunities.

PR contact: Rick Stephens (Content Marketing Lead) T: 01202 786 859 │ E: rick.stephens@glenigan-old.thrv.uk