Amazon is constantly expanding into new markets. What started out as an online book store has grown into the world’s largest online retailer. Now Amazon, already exploring the grocery business, is toying with new concepts in the food industry. Can Amazon compete?
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Amazon never lacks for innovation. So it’s no surprise the online retailer is looking to take over and disrupt new industries. Now, CEO Jeff Bezos has his eyes set on new ways of connecting people with fresh produce and consumables through convenience and drive up stores. Can Amazon, whose success has come through online sales, compete in a brick and mortar world?
Amazon has been rumored to be working on grocery stores for over a year now, and is finally getting close to an expansion of its current Amazon Fresh delivery service. The existing produce delivery service is available only to Amazon Prime members. The new physical locations would be available only to Amazon Fresh members.
The Amazon Fresh stores will allow shoppers to place their orders through traditional online methods via smartphone, or even by tablets placed around the store. Shoppers can then go in and pick up their groceries, already bagged and waiting for them. These brick and mortar stores would compete directly with local convenience stores, who often raise prices on goods in exchange for said convenience. By providing local shops where consumers can pick up goods at far more reasonable prices with the assurance of Amazon quality, Amazon sure to build a loyal fanbase in the offline market, too.
These stores are not Amazon’s first physical store, having pop up stores in the past, and the company’s first Amazon Books bookstore opened in Seattle in 2015, with more book locations planned for Chicago and Portland in 2016-2017. As consumers get more comfortable with allowing others to pick groceries (particularly produce) for them, the Amazon brand will win out for trust.
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This new direction offers an opportunity to bring in new consumers based on geography. And by minimizing operating costs through streamlining orders with technology, Amazon could find large profit margins in the physical world – especially if rent is low.
Watch Amazon Fresh on how convenient this will be in every household.
Given Amazon’s track record for success and available resources, the new plan sounds like a fresh idea. As stores go up, so do Amazon (AMZN) shares.
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