Watch out food retailers, Amazon is coming for you next! Earlier this month, Amazon announced plans to open its first Amazon Go retail grocery store in Seattle. Marketed as “conveniently compact,” the checkout-free store offers a limited selection of grocery and prepared food and employs technologies previously associated with self-driving cars, including computer vision, sensor fusion and deep learning, to enable shoppers to walk in, scan a QR code, select their items and have their groceries charged to their Amazon account as they exit the store. There’s no waiting, no cash, and, best of all, no hassle.
Beyond Convenience – It’s Shopping On Demand
Wondering when an Amazon Go grocery store might be opening in your neighborhood? It might be sooner than you think—the company intends to open 20 physical stores in 20 major U.S. cities over the next two years and as many as 2,000 in the next decade. Although Amazon Go shops are more convenience store than suburban mega-supermarket, it signals a major shift in the way consumers, specifically Millennials and Generation Z, shop and a mindset that prizes convenience and speed over selection.
Online Grocery Trends
Does this mean that traditional grocery stores will go the way of the dinosaur? Not exactly, but the channel isn’t going to remain the same either: Shoppers are already relying on a broader number of less traditional channels to purchase food items: dollar stores, mass retailers, convenience stores, and e-commerce, shifting spend away from supermarkets. Among Millennials, 28% say they are shopping for grocery items online, at least occasionally. Although Amazon accounts for less than 1% of total U.S. grocery sales, more people are beginning to turn to the e-commerce giant for consumables—18% more people shopped for groceries in their first quarter of 2016, than in the prior year.
Millennials are also more likely to employ digital tools in their grocery shopping path to purchase. Almost a quarter say they’ve used a grocery store app, 17% follow grocery retailers on social media, and 10% have enabled text messages from their supermarket. Millennials are also more likely to use digital coupons (59%), look up recipes (66%), and check weekly sales (55%) online.
Disruption in Food Marketing
Amazon’s real strength in the Amazon Go concept is its disruptive technology. With the elimination of a checkout line, Amazon Go moves way beyond self-checkout to offer a frictionless experience that’s priceless for busy consumers. Amazon has fundamentally changed the relationship between retailers and consumers by giving shoppers exactly what they want–when and where they want it, and they’ve turned their attention to food. It’s now up to grocery chains and food brands to further revolutionize the shopping experience to get the consumer in the door. Creating modern store designs, employing in-store concierge services, leveraging digital tools, and upgrading loyalty programs are just a few ways to create the store of the future and remain competitive.
In this new, hypercompetitive era, grocery retailers and brands must not only innovate and transform, but communicate those transformations meaningfully to a demanding Millennials audience. Women’s Marketing offers brands insight into their core customer and their path-to-purchase. Contact us to learn how we can help your brand build awareness to stand out on-line or on-shelf.
Sources: U.S. Grocery Shopping Trends 2016, Retail Dive How Amazon Go Will Revolutionize Convenience