Amazon has opened its first Fresh grocery store, featuring specialized shopping carts that let customers skip checkout lines and even an in-store Alexa to answer customer questions.
The Amazon Fresh supermarket opened in the Woodland Hills neighborhood of Los Angeles as the e-commerce company builds out its offline presence despite the shift to online shopping caused by the coronavirus pandemic.
The store will also offer same-day delivery and pickup.
Amazon already owns the Whole Foods Market chain but bosses say the Amazon Fresh stores will cater to a different set of customers with less of a focus on organic items, more national brands, and lower prices.
The new store is roughly the size of a Whole Foods store at 35,000 square feet, but serves a different need, not focused on natural and organic items, said Amazon Vice President Jeff Helbling.
The store will carry mainstream brands that Whole Foods does not – such as Coca-Cola, Tide, Oreos and Kellogg’s – as well as the Whole Foods’ cheaper private-label brand, 365.
Amazon’s own brands, including Happy Belly snacks, Cursive wine and a new line of Fresh-branded food products, will also be available.
‘Grocery is a very large consumer sector; by most measures, it’s $800 billion in the US,’ Helbling told CNN Business . ‘And collectively, we’re relatively small in the space.
‘We do think of these formats as complementing one another and serving different needs,’ he added.
‘Whole Foods is a longstanding pioneer and leader in natural, organic and clean foods. Amazon’s Fresh selection is fairly different. We see them operating next to one another and we’re excited to offer customers the choice between the two.’
The Amazon Fresh store blends in-store and online shopping and will also be the first with the ‘Amazon Dash Cart’.
The ‘smart cart’ looks like a general one-basket convenience cart but is equipped with bar code readers, sensors and scales.
This lets shoppers fill up to two grocery bags, and technology systems will discern what they put in the cart and bill a credit card on file once customers leave through a designated lane.
This lets shoppers forgo the store’s cashiers – and the queues.
‘Customers simply place their bags in the cart, sign in using their Fresh QR code in the Amazon app, shop, and exit through the Dash Cart lane to automatically complete their payment,’ Amazon said in blog post. ‘The cart uses a combination of computer vision algorithms and sensor fusion to identify items put in the cart.’
The shop also has a counter for picking up and returning web orders; free same-day delivery and pickup to members of Amazon’s Prime program; and stations for questioning Amazon’s voice-controlled assistant Alexa.
Smart displays will be featured around the stores where the virtual helper can answer questions such as ‘Where can I find the mayonnaise?’ and suggest what to make for dinner.
Yet the store will also feature departments seen in a more traditional grocery store, such as produce, dry goods, seafood and meat counters.
Cashiers and check-stands will also be available for this who don’t wish to use Dash Cart or have a larger amount of groceries.
The store is the first of seven Amazon has confirmed for Southern California and greater Chicago. It let customers in by invitation only on Thursday, and will open to the wider public in the coming weeks
The opening dates for the other three Amazon Fresh stores in California and three in Illinois have not been announced as the coronavirus pandemic brings uncertainty.
Three other Fresh store locations, including in Irvine and Northridge, California, as well as Chicago’s Naperville neighborhood, are currently being used for online order fulfillment.
‘It wasn’t our initial plan, but we thought it was the best thing to do to serve the high customer demand we were seeing online only at that particular point in time,’ Helbling said.
The online retailer was also forced to alter is protocols in-store as a result of the outbreak.
It will require customers and employees to wear masks while in the store and it will limit the store to 50 percent capacity, as well as other health and safety measures.
The world’s largest online retailer has experimented with physical stores in recent years to capture more consumer spending, particularly in groceries.
Its current expansion comes despite the impact of the coronavirus speeding up the decline in brick and mortar stores.
It has more than 20 cashier-less shops with grab-and-go food for office workers and over 500 stores in the Whole Foods Market chain it acquired in 2017 for $13.7billion.
Amazon’s latest concept faces stiff competition from far larger incumbents Kroger Co and Albertsons Companies Inc.
Hebling told CNN that the retail giant currently has about four percent of the current marker share in groceries, compared to 21 percent held by Walmart.
Earlier this week it was rumored that Whole Foods may also go cashierless next year.
It is believed Jeff Wilke, Amazon’s retiring Chief of Consumer, wants to bring the technology to the upscale supermarket chain before he leaves in early 2021.
Amazon last month posted its biggest quarterly profit ever due to online sales during the coronavirus pandemic, but a 13 percent drop in physical store revenue.
Grocery sales tripled year-over-year for the company in the second quarter and it increased grocery delivery capacity by more than 160 percent.
On Wednesday, Amazon founder Jeff Bezos became the first person to have their fortune break the $200billion barrier, as s result of the surge in online shopping during the pandemic.
Bezos, 56, founded Amazon in 1994 and owns 11 per cent of the company.
On Wednesday afternoon, as Amazon’s soaring stock rose by a further two per cent, that added $4.9 billion to Bezos’s fortune.
The increase, Forbes reported, meant that, as of 1:50pm EDT on Wednesday, Bezos was worth $204.6 billion.
Bezos is now worth nearly $90billion more than the world’s second-richest person, Bill Gates, who’s currently worth $116.1 billion.
Amazon has seen its stock price rise nearly 80 per cent since the beginning of the year, as the coronavirus pandemic forced people to remain in their homes.
Bezos was worth roughly $115 billion on January 1, but has seen his wealth increase by more than $85 billion since then.
His epic payday came while Amazon workers were protesting that they did not have enough PPE to protect them during the pandemic.