How will AmazonFresh Pickup stores affect the grocery business?
It’s not exactly a secret that Amazon.com has been working on its own drive-up grocery concept. New reporting, however, shows the company is getting closer to launch and as the time approaches come the inevitable questions of what Amazon plans to do with its new concept and what will it mean for rival retailers.
Geekwire reports that Amazon received permission from permitting authorities in Seattle to install signs reading “AmazonFresh Pickup” at two locations in the city’s Ballard and SoDo neighborhoods. Windows at the entrances of the store read, “Hello Ballard” and “Hello SoDo.”
Amazon’s permit filings also show signs on the exterior walls of the stores that read, “Shop online. Pick up here.” and “Relax while we load your groceries.”
Each location, according to Geekwire, will include a physical store as well as an awning for drivers to park under. Hours of operation for the stores are expected to be between 7:00 a.m. and 10:00 p.m. Amazon has yet to publicly acknowledge plans to open the grocery pickup stores.
Research by Cowen estimates that online grocery sales will grow at a 20 percent annual compound rate over the next five years. Amazon, which is currently the ninth largest grocer in the U.S., according to the firm, will likely move to the number three slot by 2021.
Separately, the Food Marketing Institute and Nielsen project consumer spending on online groceries may reach as high as $100 billion or 20 percent of total dollar grocery purchases by 2025. That is equivalent to 3,000 grocery stores, based on volume.
With the AmazonFresh Pickup concept, Amazon continues to explore the potential of using brick and mortar locations to improve its business. The company recently unveiled an Amazon Go convenience store concept in Seattle. It also announced plans to open its tenth Amazon Books store and a pickup store on the campus of Ohio State.
- Documents reveal ‘AmazonFresh Pickup’ as the tech giant’s next physical retail concept – GeekWire
- Will using Uber for home deliveries work for Kroger? – RetailWire
- How will online shopping transform the grocery business? – RetailWire
- Amazon just confirmed its 10th book store, signaling this is way more than an experiment – Recode
- Amazon Opening First Retail Pick-Up Store in Columbus – Columbus Underground
DISCUSSION QUESTIONS: Will Amazon climb into the ranks of the top five grocery retailers in the U.S. over the next five years? How do you expect the opening of the first two AmazonFresh Pickup stores will affect planning by other grocery retailers?