Key Points
- Amazon is trying out the addition of automated micro fulfillment centers inside Whole Foods supermarkets.
- With this new store format, customers are able to order items directly from the chain’s own website, as well as a large supermarket and browse through Whole Foods and pick it up at the cash register.
- By allowing customers to complete all their shopping in one go, Amazon is expecting to take a greater share of grocery revenue than its competition.
On Wednesday, Amazon announced that it is experimenting with the placement of small storage facilities in Whole Foods grocery stores to minimize the competition that the supermarkets face from other grocery stores.
The firm is developing a micro fulfilment centre in connection with a Whole Foods supermarket in Plymouth Meeting, a suburb of Philadelphia. When the centre is functional in about a year, customers will be able to shop for products on Amazon and its grocery service, Amazon Fresh, while inside a Whole Foods store and collect the orders as they go through the checkout process.
During a press conference close to an Amazon distribution center in Nashville, Anand Varadarajan, head of product and technology for Amazon’s grocery business worldwide, presented an architectural rendering of the prospective building. The concept involves attaching a small automated warehouse to a Whole Foods Market outlet where drones will collect and transport items such as socks, soda bottles, or tennis rackets into bags for customers.
This would enable patrons to purchase everyday consumables from companies which the Whole Foods market does not stock like Pepsi and Kellogg’s and also make use of Amazon’s ever-expanding stock of items.
As stated by Amazon, it wants to eliminate the need of customers going to other grocery shops, again. Most Americans go grocery shopping for up to two stores a week and this could be for reasons such as cost and saving at each store, a wider range of products, different store times, or offers at the respective stores, according to an April research by the market research firm Drive Research.
“Current Whole Foods Market customers want natural and organic food items,” said Varadarajan during the presentation on Wednesday. “But our insights reveal that many of them actually go to other stores to buy groceries as well. So, with the heterogeneous microwave fulfillment center we have we can able to cater for the customers who do not wish to go to stores, or place several online orders.”
For many years now, Amazon has been increasing its effort to take a larger portion of the grocery market dominance. This is a segment of consumer spending in the United States that sees more expenditure from the population as compared to any other vertical such as clothing or electronic items. But Amazon has competition aplenty with the likes of established companies such as Walmart, Kroger and Albertson, not to mention numerous other regional supermarket chains.
In 2017, it acquired Whole Foods at a price of $13.7 Billion which is more than 10 times the amount Amazon had previously spent in any acquisition. Ever since, it has also embarked on a wide range of grocery economizing offerings; including a grocery delivery service and also its chains of supermarkets dubbed Amazon Fresh which targets the masses.
As has indicated the CEO of Amazon Jassy, the multiplication of the sale of daliy necessities includes items like empty toilet roll boxes, washing up liquid and the like.
