Amazon Fresh: Just Walk Out

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Re: Amazon Fresh: Just Walk Out

Post by ClownLoach »

storewanderer wrote: July 20th, 2022, 12:09 am
buckguy wrote: July 14th, 2022, 8:49 am

Amazon is primarily a software company and that's always a useful starting point for thinking about what they are doing. The are pretty clear practical issues here and I'm guessing that this is a beta test, with enough faith in the concept to roll it in multiple places. If it isn't too resource intensive it could turn into something very competitive, but they may actually be more interested in the data for other purposes or to eventually sell some aspect(s) of the model.

The Amazon Fresh format is heavy on refrigerated items and although that's expensive to operate and doesn't get many customers. That format probably makes it easy to collect data (using weight or other indices of items taken) for frozen or refrigerated items, which may be the actual point of the stores.
I don't find Amazon Fresh to be particularly heavy on refrigerated items. The amount of space for meat, produce, frozen, and dairy seems about in line with a typical grocery store of its size if not slightly small for frozen/dairy. Bakery and deli vary a lot by chain and my view is they have more space than they can fill in these stores but it isn't necessarily too much refrigeration (too much space, too large of food bars, etc.).

But having the concept heavy on refrigerated items may make some sense. If they were to fulfill "dry" orders at a robotic/satellite warehouse and then partial pick refrigerated items at Amazon Fresh then send the orders out for delivery within a few mile radius of the Amazon Fresh store, that may make sense.
Amazon retail sales are about what Kroger does each year, that's before AWS revenue, so I think the myth that they're primarily a software company is shot; they are a retail behemoth.

The model is pretty clear at this point: these are local fulfillment centers for Amazon delivery. The only reason for using retail space instead of cheaper industrial is that they can offset the higher rents with incremental walk in sales and establish a pickup business. If you visit one of the stores with a more visible delivery stockroom, like Long Beach CA where it is up front, then you can see the massive number of carts staged in the morning waiting to go out for delivery. I think more sales volume is going out the door for delivery than through the cash register. Finally they get to play with their technology like the dash carts and just walk out cameras with live customers. But these are absolutely not "retail first stores" in any way, they are microfulfillment centers. In the Amazon warehouse hub of SoCal (Inland Empire) they still fulfill orders direct from their warehouses without going through a separate delivery hub like they do now in LA and Orange County - so now they're adding a few Fresh stores out there too in carefully selected locations that are a further distance from the warehouses (Murrieta, South Corona which is still under construction) so they can reduce the distance they're driving groceries to deliver at a lower cost in the market.
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Re: Amazon Fresh: Just Walk Out

Post by buckguy »

ClownLoach wrote: July 21st, 2022, 9:11 am
storewanderer wrote: July 20th, 2022, 12:09 am
buckguy wrote: July 14th, 2022, 8:49 am

Amazon is primarily a software company and that's always a useful starting point for thinking about what they are doing. The are pretty clear practical issues here and I'm guessing that this is a beta test, with enough faith in the concept to roll it in multiple places. If it isn't too resource intensive it could turn into something very competitive, but they may actually be more interested in the data for other purposes or to eventually sell some aspect(s) of the model.

The Amazon Fresh format is heavy on refrigerated items and although that's expensive to operate and doesn't get many customers. That format probably makes it easy to collect data (using weight or other indices of items taken) for frozen or refrigerated items, which may be the actual point of the stores.
I don't find Amazon Fresh to be particularly heavy on refrigerated items. The amount of space for meat, produce, frozen, and dairy seems about in line with a typical grocery store of its size if not slightly small for frozen/dairy. Bakery and deli vary a lot by chain and my view is they have more space than they can fill in these stores but it isn't necessarily too much refrigeration (too much space, too large of food bars, etc.).

But having the concept heavy on refrigerated items may make some sense. If they were to fulfill "dry" orders at a robotic/satellite warehouse and then partial pick refrigerated items at Amazon Fresh then send the orders out for delivery within a few mile radius of the Amazon Fresh store, that may make sense.
Amazon retail sales are about what Kroger does each year, that's before AWS revenue, so I think the myth that they're primarily a software company is shot; they are a retail behemoth.

The model is pretty clear at this point: these are local fulfillment centers for Amazon delivery. The only reason for using retail space instead of cheaper industrial is that they can offset the higher rents with incremental walk in sales and establish a pickup business. If you visit one of the stores with a more visible delivery stockroom, like Long Beach CA where it is up front, then you can see the massive number of carts staged in the morning waiting to go out for delivery. I think more sales volume is going out the door for delivery than through the cash register. Finally they get to play with their technology like the dash carts and just walk out cameras with live customers. But these are absolutely not "retail first stores" in any way, they are microfulfillment centers. In the Amazon warehouse hub of SoCal (Inland Empire) they still fulfill orders direct from their warehouses without going through a separate delivery hub like they do now in LA and Orange County - so now they're adding a few Fresh stores out there too in carefully selected locations that are a further distance from the warehouses (Murrieta, South Corona which is still under construction) so they can reduce the distance they're driving groceries to deliver at a lower cost in the market.
They generate cash and data from the retail side. It's huge, but it's never been profitable. They are not a traditional retail operation. They can easily lose money with food if it enables them to create data and logistics services that they can sell to others, regardless of whether they ever use it in their own operations. Bezos started with books because it provided information about relatively affluent consumers and it was a pretty old fashioned business that easily could be shaken up. Amazon was not the first online bookseller but they saw something beyond the business itself. Amazon now doesn't seem as interested in widening its retail scope as it once was---it probably gets back to data and what works in their logistics channels. My local Amazon Fresh competes with TJs, WF, Safeway and Giant-MD and never has many customers. A normal chain business would have sublet the space by now--some neighboring spaces already have turned over.
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Re: Amazon Fresh: Just Walk Out

Post by mbz321 »

It looks like the experiment with the 'Dash Carts' might be over. Two locations opened this week, Oceanside NY and Paramus NJ. Both have the 'just walk out' option instead. Just looking at the reviews on the web for both stores seem to be pretty 'meh'. It seems Amazon has a lot of these Fresh stores in the works all over the place, but I just don't see it working out.
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Re: Amazon Fresh: Just Walk Out

Post by storewanderer »

mbz321 wrote: July 21st, 2022, 6:55 pm It looks like the experiment with the 'Dash Carts' might be over. Two locations opened this week, Oceanside NY and Paramus NJ. Both have the 'just walk out' option instead. Just looking at the reviews on the web for both stores seem to be pretty 'meh'. It seems Amazon has a lot of these Fresh stores in the works all over the place, but I just don't see it working out.
Same goes for the newer CA Stores. No more dash carts in the stores that are completed recently.

Calitalian reported on one that opened recently with dash carts but it had been sitting for months ready and waiting to open. I think that was a unique situation.

It is too bad as I like the dash cart a lot (for using their coupon...). I guess as a walk in customer not using a coupon I'm not sure if I'd use it or not.
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Re: Amazon Fresh: Just Walk Out

Post by mbz321 »

storewanderer wrote: July 21st, 2022, 9:52 pm
It is too bad as I like the dash cart a lot (for using their coupon...)
Exactly. I see another location in my area currently under construction despite not being announced anywhere (the exterior is pretty recognizable at this point) and was hoping for some more coupons if they ever open. I guess it will be time to 'dumpster dive' in the post office trash cans for physical copies around where the store will be opening. :lol:
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Re: Amazon Fresh: Just Walk Out

Post by storewanderer »

mbz321 wrote: July 22nd, 2022, 12:40 pm
storewanderer wrote: July 21st, 2022, 9:52 pm
It is too bad as I like the dash cart a lot (for using their coupon...)
Exactly. I see another location in my area currently under construction despite not being announced anywhere (the exterior is pretty recognizable at this point) and was hoping for some more coupons if they ever open. I guess it will be time to 'dumpster dive' in the post office trash cans for physical copies around where the store will be opening. :lol:
How does the actual cashier work at Amazon Fresh? I've never gone to an actual cashier there before. Do they have the scanner point toward you so you can scan something without the cashier having to look at it and scan it? Doesn't Whole Foods have a scanner facing the customer so a customer can scan an Amazon App on their own (without cashier having to do anything)?
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Re: Amazon Fresh: Just Walk Out

Post by mbz321 »

storewanderer wrote: July 23rd, 2022, 12:15 am

How does the actual cashier work at Amazon Fresh? I've never gone to an actual cashier there before. Do they have the scanner point toward you so you can scan something without the cashier having to look at it and scan it? Doesn't Whole Foods have a scanner facing the customer so a customer can scan an Amazon App on their own (without cashier having to do anything)?
There's a little scanner next to the credit card reader to sign into your Amazon account or to scan coupons. I have never bought anything at Whole Foods in my life so idk how their checkouts work.
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Re: Amazon Fresh: Just Walk Out

Post by Alpha8472 »

Whole Foods has self checkout in some stores. The regular checkout has a scanner facing you that lets you scan your Amazon app for a prime discount.
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Re: Amazon Fresh: Just Walk Out

Post by marketreportblog »

Out here in New Jersey, The Star-Ledger did NOT like the first Amazon Fresh in the state.
https://www.nj.com/entertainment/2022/0 ... eview.html

Not a great introduction to the state, especially since The Star-Ledger (and its related NJ.com) is a major news publication for the whole state. So this is some of the first coverage there has been statewide to its market entry. Obviously, they have many more chances to redeem themselves, but if areas of the state that don't yet have Amazon Fresh are reading this, they won't necessarily be excited to try it out when the stores do arrive. And there are quite a few others in progress (Hanover, Eatontown, Woodland Park, Lodi, Holmdel... though not all have been announced officially). We will see how they fare in the Garden State.
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Re: Amazon Fresh: Just Walk Out

Post by storewanderer »

marketreportblog wrote: July 27th, 2022, 7:30 pm Out here in New Jersey, The Star-Ledger did NOT like the first Amazon Fresh in the state.
https://www.nj.com/entertainment/2022/0 ... eview.html

Not a great introduction to the state, especially since The Star-Ledger (and its related NJ.com) is a major news publication for the whole state. So this is some of the first coverage there has been statewide to its market entry. Obviously, they have many more chances to redeem themselves, but if areas of the state that don't yet have Amazon Fresh are reading this, they won't necessarily be excited to try it out when the stores do arrive. And there are quite a few others in progress (Hanover, Eatontown, Woodland Park, Lodi, Holmdel... though not all have been announced officially). We will see how they fare in the Garden State.
Sounds pretty similar to what most of the CA Stores are like. At least they are consistent.

I think Amazon needs to be careful with what they are doing with these stores. Could a lousy physical store sour customers from ordering on Amazon's website in the future?

I have not really heard anyone who has said they like these Amazon Fresh Stores either. I did see some high points (especially in Long Beach unit) but really without those high value coupons not sure why anyone would use them unless they were convenient and they had a limited shopping list to take care of.
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