Fast Five Shorts | Amazon To Open 8 New Amazon Fresh Stores
In the latest edition of Omni Talk’s Retail Fast Five, sponsored by the A&M Consumer and Retail Group, Avalara, Mirakl, Ownit AI, and Ocampo Capital Chris Walton and Anne Mezzenga discuss: Amazon Opening 8 New Amazon Fresh Stores
For the full episode head here:https://youtu.be/HfqxboxZ35Q
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Transcript
Amazon Fresh is not dead.
Speaker A:Yes, according to Grocery Dive.
Speaker B:Not dead yet.
Speaker A:According to Grocery Dive, Amazon confirmed the opening of eight stores across five states and will continue to selectively add locations based on consumer response.
Speaker A:After surpassing the 50 store mark in September, Amazon Fresh's footprint now consists of 60 stores after the company recently opened three stores in California, two in New York, and one each in Maryland and Pennsylvania and New Jersey.
Speaker A:The company confirmed the locations range from 31,000 to 59,000 square feet.
Speaker A:And Amazon is, quote, encouraged by early signs, end quote, coming from stores that follow the refresh design it debuted in Chicago and Southern California last year.
Speaker A:Chris, do these Amazon Fresh new store openings change your mind at all about Amazon's grocery strategy?
Speaker A:We're back talking about Amazon grocery strategy.
Speaker B:And I'm thinking, I'm thinking, I'm thinking, I'm thinking, no, not a bit.
Speaker B:Not a bit.
Speaker B:Not a bit.
Speaker B:No, no, no.
Speaker B:You know, when I, when I read this headline, I think on the plus side, I could say that at least geographically, they're keeping them concentrated to specific markets, right?
Speaker B:They're not like building one random one in Kansas, for example, you know, so, so that's good.
Speaker B:That's, I mean, small win, but you got to take them where you can.
Speaker B:But, but with that said, I think what I find most interesting about this headline is the undertone.
Speaker B:You know, it's the undertone of the headlines.
Speaker B:As I read about them this week, it's all about the quote, testing and learning.
Speaker B:And those are my quotes, really.
Speaker B:Those are Joey Tribbiani quotes.
Speaker B:It's like it's all about testing and learning.
Speaker B:It's not anything about, like, why people should change their grocery shopping habits and shop these new Amazon Fresh stores.
Speaker B:And I got news for you, Amazon, once you get to 60 stores operating on both coasts in Illinois, it gets a lot harder and harder to refresh in those investments into something that is captivating.
Speaker B:Because at, at 60 stores, and I mean, you know, it, you're already kind of a chain.
Speaker B:You know, you're a chain, you're a grocery chain at 60 stores.
Speaker B:And so generally speaking, when you're at 60 stores, you got a prototype that works.
Speaker B:And that's not the case here if you're still testing and learning.
Speaker B:So, you know, I think at the end of the day, we step back here.
Speaker B:We think Amazon just got ahead of itself with just walkout technology being the hook and its expansion plans.
Speaker B:And, you know, they're just likely saying test and learn because they quite honestly know they just don't have a strategy that's that captivating, that is that convincing, it's going to work right now.
Speaker B:That's my opinion on this story.
Speaker B:But I'm curious what you think.
Speaker A:Yeah, I mean, I agree.
Speaker A:I'm, I'm really curious as these stores are rolling out to see what is pulled, if anything from the tests that we've talked about over the last couple of weeks that are being conducted with the, you know, the attached automated warehouses or the attack, you know, the different concepts that they've been testing in some of the other newer stores.
Speaker A:But the other thing too, Chris, for me, especially given the story we just talked about with Dollar General and Elf and you know, their expansion, especially as they go into food, like I think low prices are going to be key here and if I'm Amazon fresh, I think right.
Speaker A:Based on what they've learned so far, like you are going to, to me the key benefit here is going to be can you get the lowest prices possible on the highest quality food?
Speaker A:Like can you be the Elf beauty of food?
Speaker A:Is that a survivable strategy for Amazon?
Speaker A:Because it's not about the experience based shopping like you talked about.
Speaker A:It's not about just walk out anymore.
Speaker A:Like there's not enough of a reason to go to these stores.
Speaker A:So I'm really, I'm really curious to see like what they do end up changing and hopeful that this isn't just like, you know, they've been, these stores have been vacant for seven years and they've decided to, you know, do a concept in here again or something.
Speaker A:So it's there, there's a lot that, there's a lot that they have to do to win and I, I don't know that they're ready to do it based on what we've heard in the last few months.
Speaker B:Well, you have, you bring up two questions I want to ask you based on what you said.
Speaker B:So like one, well one, one more is a statement.
Speaker B:The other one's a question.
Speaker B: ces when you have Walmart and: Speaker B:So like that just seems impossible.
Speaker B:But the other point I want to ask you about is like, because you brought up, you're interested in seeing the tests, right?
Speaker B:Like you know, do they start incorporating some of the other tests we've seen, like the warehouse, you know, in, you know, alongside the store or whatnot.
Speaker B:But like, I'm asking you, does.
Speaker B:I mean, we've talked about this a little bit, but I don't think we talked about it as overtly.
Speaker B:Like, does the idea that you can buy Pepsi from a micro warehouse while you're shopping a store make you want to go to that store?
Speaker B:No, no.
Speaker B:Like, it doesn't.
Speaker B:It doesn't do.
Speaker B:It does Jack all for me, honestly, like, that doesn't make me want to switch from Kroger or Walmart or anywhere else I'm going.
Speaker B:Like, does it?
Speaker B:I mean, when you think about it.
Speaker A:That way, yeah, it's another step.
Speaker A:It's like kind of the opposite, which is funny.
Speaker A:It's kind of the opposite of what just walk out would to do.
Speaker A:It's like, now we're gonna create a new grocery store and you're gonna have to shop another new way that's less convenient.
Speaker A:Like, now you have to put in your order for your Pepsi and your lay's potato chips in a separate way than you.
Speaker A:You could have before, or you could just go to Kroger across the street and get.
Speaker A:Get it all done in one.
Speaker A:One fell swoop.
Speaker B:But yeah, it reminds me of the analogy that somebody told us when we started entrepreneurship, where they said entrepreneurship is like you're drowning trying to save a kid, and somebody throws another kid and asks you to save them too.
Speaker B:You know, like, here you go.
Speaker B:That kind of feels like Amazon's grocery strategy right now.
Speaker B:I don't know.
Speaker B:But hey, gotta do what you gotta do.
Speaker B:Test and learn.
Speaker B:Test and learn, always.
Speaker B:You can never argue with test and learn.
Speaker B:Never.
Speaker A:Oh, God.
Speaker A:The cities are probably happy that.
Speaker A:That they're going back into these vacant buildings that have been sitting there.
Speaker A:At least I'm sure that's the.
Speaker A:That might be the part of this.
Speaker B:Yeah.
