Amazon Halts All New Amazon Fresh Just Walk Out Stores

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Alpha8472
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Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by Alpha8472 »

Anazon is halting all new Amazon Fresh Just Walk Out stores unless the lease is already signed. Amazon cited disappointing sales and losses. The Just Walk Out technology was flawed and had many problems. Many people requested refunds and Amazon gladly refunded items without proof. It was losing quite a bit of money.

Poor sales, rising costs, dysfunctional team leadership, etc. all contributed. Amazon walked away from trying to obtain many sites.

https://www.businessinsider.com/amazon- ... res-2022-8
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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by storewanderer »

Alpha8472 wrote: September 20th, 2022, 10:19 pm Anazon is halting all new Amazon Fresh Just Walk Out stores unless the lease is already signed. Amazon cited disappointing sales and losses. The Just Walk Out technology was flawed and had many problems. Many people requested refunds and Amazon gladly refunded items without proof. It was losing quite a bit of money.

Poor sales, rising costs, dysfunctional team leadership, etc. all contributed. Amazon walked away from trying to obtain many sites.

https://www.businessinsider.com/amazon- ... res-2022-8
Just Walk Out is miserable technology. The stores are just not great. The only way these stores can possibly make any sense is if they fulfill so many online orders that somehow having them placed close to houses makes sense. The stores, as "stores" counting on walk in customers, are just not going to appeal to most customers walking in. Just Walk Out is a joke and should be scrapped immediately and I am amazed consumer protection agencies in CA have not nailed them for not providing receipts to customers upon exit or even showing the customer what their total is until many hours after they exit the store. I can only imagine how many billing errors there are. I am highly suspicious all of the "technology" does not work in an automated fashion and the "technology" is some lab somewhere of a bunch of people watching you shop and trying to figure out the UPC of what you buy so you they can add it to your tab. And that is why they can't produce a receipt for hours after you shop. If it was "automated" they should be able to provide you with a receipt at exit, even a running receipt as you shop, if it is really "automated."

I am surprised based on the article that they are continuing any store openings at all. Let's see if they actually continue any openings. Maybe they will convert some into dark fulfillment only stores, convert some to Whole Foods, and dump the rest.

Still I would gladly shop them with a $20 off $40 (before sale prices) coupon. Some great deals were to be had. Produce in Long Beach appeared to be from the same supply chain as Whole Foods and was excellent. Produce in a couple other locations down there I visited looked terrible for some reason.

This feels like the same type of stuff that was said when they got out of 365. And new stores with leases signed like South Lake Tahoe 365 sat in limbo for months.
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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by norcalriteaidclerk »

Now it would interesting to see if the Sacramento sites will even opened as planned,open as whole foods,or get completely mothballed.Would rather see Citrus Heights sunrise village (for more reasons than one) become whole foods than get mothballed entirely.Sacramento Country Club and Roseville/Rocklin sites appear to be too close to existing whole foods locations.Don't know which other local sites if any were at least under consideration.

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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

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norcalriteaidclerk wrote: September 20th, 2022, 11:00 pm Now it would interesting to see if the Sacramento sites will even opened as planned,open as whole foods,or get completely mothballed.Would rather see Citrus Heights sunrise village (for more reasons than one) become whole foods than get mothballed entirely.Sacramento Country Club and Roseville/Rocklin sites appear to be too close to existing whole foods locations.Don't know which other local sites if any were at least under consideration.

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Country Club and Roseville don't strike me as good Whole Foods sites. Country Club is the wrong neighborhood for Whole Foods. Roseville site has poor visibility and is near the existing Whole Foods. Sunrise Village may actually make some sense for a more center store focused Whole Foods (probably would have been a great match for the old 365 concept) that doesn't have much perimeter. Busy intersection, bordering a lot of areas, where is the nearest Sprouts? Just the one near Sunrise (which I don't find to be too busy)? I know Trader Joe's is nearby.

How far along are they on finishing Sunrise Village? I thought Roseville had refrigeration installed some time ago but still no sign of when it will open. Have not been by Country Club.
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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by J-Man »

He Pasadena (CA) store (with Just Walk Out) opened last Thursday. It's located in a former OSH and was under development for over a year.
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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by BatteryMill »

J-Man wrote: September 21st, 2022, 4:36 am He Pasadena (CA) store (with Just Walk Out) opened last Thursday. It's located in a former OSH and was under development for over a year.
This is as Amazon tries to attain a certain number of openings per quarter, and as it takes time for them to set up "Just Walk Out" technology - all while trying to remain rather covert.

I don't mind that the concept has been frozen, but I wonder if more is likely to escalate.
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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by norcalriteaidclerk »

storewanderer wrote:
norcalriteaidclerk wrote: September 20th, 2022, 11:00 pm Now it would interesting to see if the Sacramento sites will even opened as planned,open as whole foods,or get completely mothballed.Would rather see Citrus Heights sunrise village (for more reasons than one) become whole foods than get mothballed entirely.Sacramento Country Club and Roseville/Rocklin sites appear to be too close to existing whole foods locations.Don't know which other local sites if any were at least under consideration.

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Country Club and Roseville don't strike me as good Whole Foods sites. Country Club is the wrong neighborhood for Whole Foods. Roseville site has poor visibility and is near the existing Whole Foods. Sunrise Village may actually make some sense for a more center store focused Whole Foods (probably would have been a great match for the old 365 concept) that doesn't have much perimeter. Busy intersection, bordering a lot of areas, where is the nearest Sprouts? Just the one near Sunrise (which I don't find to be too busy)? I know Trader Joe's is nearby.

How far along are they on finishing Sunrise Village? I thought Roseville had refrigeration installed some time ago but still no sign of when it will open. Have not been by Country Club.
Sunrise village definitely doesn't figure be finished before spring regardless (February at least),partial demolition and inside out alteration if existing vacant anchor buildings(previously occupied by since relocated JoAnn and Tuesday morning stores)remains a work in progress.The existing Arden WF is only about 35k SF as it is(don't know the Roseville square footage).The greenback/sunrise sprouts was traditionally busy since opening late 2011 though volume has leveled off within the past year or two and to this day still lacks self checkout.

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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by ClownLoach »

Interestingly enough I read somewhere recently that Amazon very quietly is going back to the Dash Carts in a few upcoming Whole Foods stores. The Dash Cart did work well if you chose to use it as you would get a total as you shopped and bagged your items. This technology has not been used in a Whole Foods as of yet, so it was interesting to see it coming back.

The dash cart currently is very expensive because it basically has an entire computer server built into the bottom of each cart but I'm sure that they will be able to downsize that equipment quickly and make this solution more cost effective. It was obvious that the earlier Fresh stores with the Dash Cart were more popular with customers, to the point where many would queue to wait for a Dash Cart vs shopping traditionally. Those folks tell all their friends to go check out the cool new store with the cool carts. More on why this is important in a minute.

My brother is a network engineer and I took him to what I believe is the smallest Amazon Fresh full line grocery store in Murrieta, CA (it was built in a old Rite Aid and couldn't be more than 20K Sq ft on the sales floor while most Fresh stores are around 40K). He was staring at the cables, switches and bus ways for the camera system on the ceiling in disbelief. He said that the cost of wiring a store like that would be in the neighborhood of $10M and of course nobody knows how massive the server infrastructure in the back room is. He estimated that there were at least 100 MILES OF CABLES in that facility. Every ten feet overhead were network switching devices that he said were hundreds of dollars each. Needless to say no grocery store spends $10M on interior build out; some flagship Whole Foods stores have been noted in news stories as having spent $5M to $6M on upgraded interior features like expanded bakeries or dining facilities. So to be spending $10M a store on WIRING is absolutely bonkers stupid. I doubt Costco spends close to $10 million on the final interior build outs of their warehouse size stores.

I have been to this same Amazon Fresh store with Just Walk Out maybe half a dozen times, each time to make a return at the service counter. Every time there is at least one customer arguing and frustrated with the employee at the entrance because they can't figure out how to even get into the store through the gates, and on the way out there is a customer arguing about not having a receipt. If there are two other customers anywhere else in the store I'd be surprised. So that's about a 50% rate of highly dissatisfied customers. Having worked for both highly successful and failing retailers I can tell you that the customer service surveys for a highly successful retailer will be over 90% of customers rating either a "4 or a 5 overall.". And those highly successful retailers count a 4 rating of "satisfied" as a failing grade along with anything below, so the store is rated on percent of "5 out of 5" ratings where the customer has indicated they are extremely happy, or highly satisfied with their experience. The failing retailer I worked for averaged highly satisfied overall percentage in the 50% to 60% range and rode that right to Chapter 7 liquidation. Based on the visual observation at Amazon Fresh with Just Walk Out, I would imagine that well over 50% of their customers are highly dissatisfied - those are the ones that never come back and tell all their friends not to go.

So something went terribly wrong in the thought process at Amazon, and clearly until now there has been no accountability for costs in this Fresh experiment. They clearly built a store customers enjoyed and would come back for with the Dash Cart technology, then they turned around and halted it. Then they started massively expanding to a store with wildly expensive technology that had only been used in small convenience stores in Seattle and SF where a customer buys two or three units per transaction, and rolled it out in mass regardless of testing for customer satisfaction. I can't imagine that the first few stores with this Just Walk Out technology wouldn't have been drastically worse in the sales and customer satisfaction performance compared to the Dash Cart stores. Yet they kept pressing ahead with the rollout and I'm pretty sure that now they have more Just Walk Out stores than they have Dash Cart stores. Of course any grocery store that is underperforming in sales will also struggle to maintain freshness and presentation so now the entire store becomes a terrible experience even for the customer who figures out which magic gate lets them in without a handprint or credit card scan. And then they're forced to drastically discount the transaction with those $20 off $40 coupons in a desperate attempt to get new customers in the doors but the experience is so mediocre that it is not "sticky" and they don't return again.

Gosh, I wonder why this tanked?
Last edited by ClownLoach on September 21st, 2022, 10:51 am, edited 2 times in total.
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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by J-Man »

They make such a big deal of the stores being designed for pickup/delivery, but how do they figure out where their delivery area boundaries are? The new Pasadena Fresh store is around 8.5 miles from where I live, but apparently that's too far away. However, there's a Whole Foods just down the block from the new Fresh store that's 7.7 miles from me and I can get delivery from them.
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Re: Amazon Halts All New Amazon Fresh Just Walk Out Stores

Post by ClownLoach »

J-Man wrote: September 21st, 2022, 10:43 am They make such a big deal of the stores being designed for pickup/delivery, but how do they figure out where their delivery area boundaries are? The new Pasadena Fresh store is around 8.5 miles from where I live, but apparently that's too far away. However, there's a Whole Foods just down the block from the new Fresh store that's 7.7 miles from me and I can get delivery from them.
Which is also interesting because at one point they were delivering to Long Beach all the way from Woodland Hills. They must be struggling with finding Flex delivery drivers who will accept low gig payouts when gas is nearly $6 a gallon in LA...
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