Amazon Continues To Build Grocery Stores, but How Successful Are They?
Despite the growing trend of grocery delivery over the past few years, e-commerce giant Amazon went against the grain to open brick-and-mortar grocery stores in select markets.
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Beginning in August 2020, when Amazon opened its first traditional grocery store in Woodland Hills, California, the massive e-tailer has opened 23 Amazon Fresh stores across six states and Washington D.C.
Meanwhile, grocery delivery and pickup sales grew by 233% between August 2019 and March 2020. In October 2021, online grocery deliveries and in-store pickups reached $6.4 billion dollars, according to Statista. The Amazon e-commerce site ranked No. 1 for U.S. grocery stores in dunnhumby’s Retailer Preference Index in January 2022, while the brick-and-mortar Amazon Fresh ranked Number Five. Amazon also held the top spot on the list last year.
In light of this success, Amazon revealed plans to open at least two dozen more Amazon Fresh stores in major U.S. metro areas over the next three years, ProgressiveGrocer.com reports. The company’s stores combine high-tech features like “Just Walk Out” (cashierless checkout) and Dash Cart (shopping carts with checkout capabilities) with the brick-and-mortar experience many people still want while grocery shopping.
So, is Amazon onto something by bringing grocery shopping back to actual grocery stores, albeit with a high-tech twist? It would seem so. Although the percentage of digital grocery sales doubled from 5% to 10% during the pandemic, according to ProgressiveGrocer.com, half of U.S. shoppers say they don’t buy online and have no plans to begin grocery shopping online.
Even online grocery shoppers still make some purchases in stores — in fact, 90% of all grocery purchases reportedly take place in stores.
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To sum it all up and give you an idea of what to expect, Amazon Fresh VP Jeff Helbling said, “Our efforts to evolve our grocery experience into a seamless omnichannel offering have been well received by customers — and the industry.”
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