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Amazon’s New Kid on the Grocery Block Fits Right In
In the realm of brick-and-mortar grocery, Whole Foods isn’t the only arrow in Amazon’s quiver. A little more than three years after paying $13.4 billion for the organic/natural foods retailer and incorporating it into the larger platform in a variety of ways, Amazon rolled out Amazon fresh, offering products at cheaper price points than Whole Foods typically charges while incorporating technological features intended to improve the customer experience.
Placer.ai reports that since the first Amazon Fresh opened in Woodland Hills, CA in September of 2020, the brick-and-mortar grocery concept is growing quickly, with new locations opening up across the country. As of late October, the brand listed on its website 19 different Amazon Fresh locations, and foot traffic has been increasing accordingly, with visits up by as much as 1,000% compared to September 2020 in recent months.
To understand where Amazon Fresh fits into the grocery landscape—a competitive set that includes Whole Foods, after all—Placer.ai focused on grocery cross-pattern shopping. The analytics firm looked at early Amazon Fresh locations that opened in late 2020 in California and Illinois, to understand how customers have incorporated this option into their grocery shopping routines a year later.
“It appears that some customers shop at both Amazon Fresh and at higher end grocery stores such as Trader Joe’s or Amazon-owned Whole Foods,” Placer.ai reported. “But it also seems like Amazon Fresh’s biggest competitors are bigger, low-priced grocery stores, be it Ralphs in California or Jewel-Osco in Illinois.”
Looking at eight of the earliest Amazon Fresh locations showed consistency in traffic patterns over the course of late 2020 and into 2021. “The relative steadiness in visits shows that a core group of customers has added a trip to Amazon Fresh to their regular grocery routine, indicating that Amazon Fresh has successfully integrated into the grocery mix for the neighborhoods it entered.”
And this speaks to the unique potential Amazon Fresh has as the core of Amazon’s future grocery push, according to Placer.ai. “While the Whole Foods acquisition drove major headlines, it appears that Amazon’s grocery evolution will center more largely around a value-oriented push with Amazon Fresh. This would play directly into Amazon’s wider strength in distribution and convenience-oriented efficiency as opposed to a higher end approach that would emphasize quality and a different type of in-store experience.”
- ◦Development
