Amazon Grocery Opens In Seattle...steemCreated with Sketch.

in LeoFinance •  3 months ago 

...and one coming to Los Angeles soon.

Amazon is really going all in with its grocery business. In the United States, Wal-Mart is the leader in that field. It has somewhere around 16% marketshare. Amazon, though its acquisition of Whole Foods, sits around 4%.

The company's approach to the low margin grocery business is to use technology to improve margins.


Initially, it started with AmazonGo which is convenience store sized, providing many fewer items than a traditional market. What separated this store from the likes of 7-11 is the fact that it is cashierless. A customer walks into the store, his or her card is scanned, and all items placed in the cart are registered as they are loaded in.

Once shopping is finished, the customer simply walks out of the store and the card is charged for the amount bought.

Amazon Grocery is taking this to the next level. These locations are coming in around 7,000 square feet, which is a bit more than twice the size of a convenience store.

The idea behind building smaller stores is that more of them can be built in a specific location, providing closer coverage to where the food is eventually consumed.

With the idea of automation, Amazon is seeking to improve margins and improve on the normally 4%-6% that traditional grocers operate on.

When Whole Foods was acquired, it was a move that baffled Wall Street. What did an online retailer want with a company that had physical locations? We are now seeing what the plans were. Amazon is intent on getting a significant share of the market. This could add billions in revenues.

I do not know what the plan is with these stores but I read that the goal with Amazon Go is to have 3,000 stores in place over the next few years. It is evident the company is merging the online and offline world.

Wal-Mart is already eliminating cashiers in an effort to stay competitive. They are also implementing robots to scan shelves and alerting staff of low stock along with robotic floor cleaners.

With such low margins, we can expect more innovation in an effort to reduce costs. There is huge financial incentive to automate as much as possible.

It will be interesting watch how this industry changes over the next 4-5 years.

If you found this article informative, please give an upvote and resteem.



Posted via Steemleo

Authors get paid when people like you upvote their post.
If you enjoyed what you read here, create your account today and start earning FREE STEEM!
Sort Order:  

@taskmaster4450le jeff bezos will just keep smiling to the bank,he is a smart businessman and i admire the way he has been able to make amazon to become a very big brand worldwide......

Posted via Steemleo

Hard to argue against the man who is the richest in the world and keeps innovating.

Posted via Steemleo

walmart and amazon are really a very huge competition but it seems that amazon seems to be so big than any other competitor and i won't be totally wrong if i call amazon number one shopping plaform.......but i discovered recently that amazon do not ship some certain products to some countries and i believe they should work on that if they want to remain at the top continuously.....

Posted via Steemleo

smart move,amazon is trying to break into various sectors to make them get wider reach and become much bigger than it is currently,having more than two thousand stores worldwide is really a great development....

Posted via Steemleo

yeah amazon is doing fine,i recently had a horrible experience on when i did some shopping some few weeks ago,after some days i discovered that there were some unsual and ungranted debit charges from my card,i informed them and they told me there was a security glitch which occurred that caused it, should work more on the softwares which helps them to process orders and help keep the credit card details of their customers is paramount....

Posted via Steemleo

so many credit card theft occur in so many online shopping malls and that is why we as customers should also be careful about the way we use our credit cards online and ensure we take some precautions when making use of them....

Posted via Steemleo

with the way amazon are opening more grocery stores,this shows that grocery business is a good business,it is a kind of business i would want to engage in someday...

Posted via Steemleo

Interesting development, just saw a headline by Walmart in that they are launching an Amazon Prime competitor. If anybody can compete with Amazon, it would be Walmart.

Posted via Steemleo

Certainly a battle royale between those two. Wal Mart has a ton of money which makes up for a lot.

It is likely we see a lot of carnage after those two battle it out. I wonder how Kroger, for example, might stack up.

Posted via Steemleo