How Amazon is Changing the Grocery Game

Photo by Simon Bak on Unsplash

This past week marks our first full year in lockdown due to the COVID-19 pandemic. Looking back across this devastating year, our lives and society have changed significantly. However, one constant factor that has continued during the pandemic, even when numerous businesses faced financial challenges, is America’s grocery stores. Whether it was many people’s only opportunity to leave their houses during the pandemic, or an opportunity for a creative outlet of baking or cooking traditional recipes for others, it is clear that grocery stores have remained in high demand. With the importance of grocery stores in our daily lives, the options to shop in these stores have grown as well. We not only have the option to shop in person, but also to shop online for pick up or delivery of groceries. Now, we may have a third option in the way we shop. 

Amazon has been quietly opening its own chain of grocery stores, Amazon Fresh, during the pandemic with a unique concept: cashier-less shopping. This new technology can save customers time in the grocery store and make it easier to follow social distancing guidelines as customers do not have to wait in the crowded check-out lines. Customers only have to scan their Prime membership when they walk out of the store, and their accounts will be automatically charged on their way out. This business model not only benefits the customer, but also benefits Amazon as well. 

According to Bloomberg, this business model is also more inexpensive to run in comparison to generic grocery stores like Aldi and Walmart. Experts call it a functional grocery store, a model we are likely to see more of in the future, reports Bloomberg analyst Matt Day. With 11 Amazon Fresh stores currently open in major cities around the country, Amazon reports plans to open 28 new stores over the coming year in locations where they see a higher percentage of prime members. 

Additionally, this new method of grocery shopping helps Amazon expand its customer outreach. According to Digital Commerce 360, 112 million people have Amazon Prime memberships. If Amazon Fresh can incorporate Prime perks into their business model, loyal Amazon customers are likely to shop at their grocery stores as well. Moreover, these Amazon Fresh stores will have a similar selection of products comparable to mainstream grocery stores like Wholefoods and Safeway. According to Amazon, their stores will include a sizeable liquor selection and the Wholefoods 360 brand. 

Through the simplicity and strategic marketing of this business model, Amazon Fresh follows a modern grocery model that we are likely to see more of in the future as cashier-less grocery shopping technology develops. Customers have seemed to enjoy this model as Amazon Fresh opens more stores, indicating a developing trend in the way we traditionally shop for groceries.