Amazon confirms plans to open a new grocery brand

Amazon said it plans to open its first new brand of grocery store in California next year, as it amps up its ambitious push to become a bigger name in food.

“Amazon is opening a grocery store in Woodland Hills in 2020,” an Amazon spokesperson confirmed to CNET, soon after the company published four new jobs postings for the location. Woodland Hills is a neighborhood in Los Angeles.

The store will be different from Amazon-owned Whole Foods, the company said. It didn’t say whether it will open more of these locations, what its selection or pricing will be, or what the brand name is. But in the jobs postings, the company described the Woodland Hills location as “Amazon’s first grocery store,” suggesting that it will have the Amazon brand name and that the company could expand to multiple sites.

The store won’t use the company’s Amazon Go technology, which allows customers to check out without waiting in line. Instead, checkout will be conventional as at other grocery stores, the company said.

In addition to Whole Foods, which Amazon bought for $13.2 billion in 2017 and has over 500 stores, the company offers grocery delivery through Amazon Fresh, the main Amazon website and Prime Now, as well as food at Amazon Go.

The Wall Street Journal in March wrote about the existence of Amazon’s new grocery store format, which the company hadn’t confirmed until this week. Last month, the publication said Amazon was already working on additional stores in Los Angeles, Chicago and Philadelphia.

The new store, though with only one confirmed location so far, points to Amazon’s growing ambition in the roughly $800 billion US grocery market, where rival Walmart is the leader and Amazon, even after its Whole Foods deal, remains a small player. Expanding in the grocery sector helps Amazon, the world’s largest online retailer, in a number of ways: It reinforces customer loyalty because people tend to shop at a local store every week and it could allow the company to continue its fast revenue growth, which typically hovers around 20% every quarter despite its massive size.

Additionally, the new line could let Amazon move into the more mainstream grocery store business, while maintaining Whole Foods as a higher-end store for organic and specialty foods. This work could offer new competition to KrogerSuperValu and many other supermarket chains.

While Amazon is known for skillfully pushing into new markets, the new store comes with lots of risk. Several of Amazon’s other physical store lines, including Amazon Go and Amazon Books, aren’t yet huge moneymakers. It’s also shuttered its line of mall kiosks, which sold Amazon devices and smart-home gear. Plus, the company would have to spend years building out a new chain of stores then bank on people switching their weekly habits to go to them. Added to that, the grocery business offers razor-thin margins, so there’s little wiggle room for Amazon to lower prices while still trying to bring in a profit.

Amazon posted job openings for a store lead, grocery associates and food service associates at the Woodland Hills store. The store has been reported to be a former Toys R Us that’s about 35,000 square feet in size.

When asked if the new stores will compete against Whole Foods or signal a move away from investing in that brand, Amazon said no, offering strong support for continuing to grow that business.

“When it comes to grocery shopping, we know customers love choice, and this new store offers another grocery option that’s distinct from Whole Foods Market, which continues to grow and remain the leader in quality natural and organic food,” the Amazon spokesperson said, noting that Whole Foods opened 17 locations this year and that more are planned. The spokesperson said Amazon will continue to invest in grocery delivery with Whole Foods.

In another sign of Amazon’s growing interest in the grocery business, the company last month did away with its $14.99 monthly fee for Amazon Fresh grocery delivery. The change undercuts rival Walmart’s new Delivery Unlimited program, which costs $12.95 a month and was just introduced in September.

Source: cnet.com

Whole Foods to test robot barista

Whole Foods Market will install a robotic barista to provide in-store coffee service at its new Houston-Midtown location through a partnership with Austin-based Briggo, according to a press release.

After launching in 2018, Briggo is making its grocery store debut with Whole Foods, offering a novel concept for the retailer and its customers in one of its newest stores.

Briggo’s order-ahead app promises to shave time off shoppers’ morning coffee runs, while digital kiosks address efficiency and customer experience in-store. Restaurant chains across the U.S. have added ordering kiosks in recent years, so the technology shouldn’t be a leap for shoppers to use. Customers can also purchase packaged Briggo coffee to brew at home, which will be available at the Houston-Midtown store or online.

The novelty of the robotic barista may draw curious coffee drinkers in the short-term and could drive a sales bump as the new Houston store gets going. Long-term, the retailer will need to see sustained sales and labor savings to justify expansion to other stores.

Grocers are applying this same cost-savings assessment to other automated technologies flooding the industry, from shelf-scanning bots to micro-fulfillment.

Whole Foods is widely known for its in-store coffee service. The retailer has a full-service espresso and coffee bar at many locations and a Capital Commons cafe in its flagship Atlanta store, all of which sell its house Allegro brand. Its Lincoln Harbor, New Jersey, location is slated to have an outpost of the Brooklyn-based coffee shop Cafe Grumpy.

The U.S. coffee market has increased in volume by 3.8% in 2018, according to Allegra World Coffee Portal’s 2019 Project Cafe USA report. Allegra conducted a survey and found that the U.S. coffee shop market grew to a valuation of $45.5 billion last year, but the industry faces issues with labor costs and increased competition.

The store is set to open Nov. 7.

Source: grocerydive.com

Amazon extends food tie-up with British supermarket Morrisons

Amazon and Morrisons have agreed to extend a partnership which already allows customers to order their shopping from the smallest of Britain’s big four supermarket groups and have it delivered by the U.S. online giant.

Periodically mooted as a possible bidder for Morrisons, Amazon has been slowly extending its food service in Britain, but market research firm Kantar Worldpanel estimates its market share is so far less than 1%.

The new Amazon agreement was for “a number of years rather than on a rolling basis, and will be exploring new opportunities to innovate and improve the shopping experience,” Bradford, northern England, based Morrisons said.

Morrisons, which has a 10.1% market share, trails market leader TescoSainsbury’s and Walmart’s Asda in annual sales.

It first tied up with Amazon in 2016 with a wholesale supply deal, whose scope has grown. In June the companies agreed to expand the “Morrisons store on Prime Now” service to more cities across Britain, including Glasgow and Newcastle.

Doug Gurr, Amazon’s UK country manager, said its relationship with Morrisons was an important part of its UK grocery growth plan.

Customers can already order a full Morrisons shop online, which is then picked at a local Morrisons store, and delivered by Amazon. There is also an option for one hour delivery.

Although Morrisons Chief Executive David Potts was vague on what the exploration would entail and declined to provide the agreement’s duration, he said as a wholesaler to Amazon the British company could be “part of their ambitions”.

“When you’re exploring, life can be a bit unclear … We achieve capital light growth by leveraging partners’ knowhow and assets,” he told reporters.

Analysts have also suggested Morrisons could be a candidate for a takeover by an overseas private equity firm, given the 24% fall in its share price over the last year and the weakness of the pound making deals cheaper.

Source: uk.reuters.com

Amazon may launch a hand recognition payment system for Whole Foods

According to New York PostAmazon is testing inside Whole Foods a payment system codenamed “Orville” that scans human hands to ring up purchases. The e-commerce giant is reportedly using its New York employees as guinea pigs by installing the system on a handful of vending machines selling chips, sodas and phone chargers in its offices.

Unlike most biometric systems that require you to touch the surface of a scanner, Amazon’s take on the technology apparently doesn’t need you to physically touch any device. The company’s technology uses computer vision and depth geometry to identify the size and shape of your hand before charging the credit card you have on file.

Further, you don’t even need to have your phone with you when you shop. That could make shopping at Whole Foods even more seamless than at Amazon Go stores, where you can pick up goods and then leave as long as you check in through a turnstile using a QR code in your app. You need to be a Prime member, however, for hand-based payments to work.

Stephanie Hare, a technology ethics researcher, told the Post that the company probably decided to give customers the option to pay with their hands instead of their face, because it would feel less like a mugshot. She warns, however, that it might not be wise to give a company your biometric data and risk being a data theft victim, especially now that there are “a couple of nation states that are really good at stealing data…”

The Post says Amazon is hoping to roll the technology out to a handful of Whole Foods stores by the beginning of next year. It has no specific locations in mind for the launch, but it’s planning to make the system available at all the supermarket’s US locations. For now, Amazon is apparently refining the technology so it can bump its accuracy up from within one ten-thousandth of 1 percent to a millionth of 1 percent before launch.

Source: engadget.com