Amazon Busy With New Formats for Grocery Stores

Amazon.com unveiled on Monday its first grocery store that is small-format called Amazon Go, one of a minimum of three formats that are brick and mortar that the e-commerce giant is looking into as it attempts to enter into an area of shopping that remains in-store stubborn.

Two other formats for stores that are being considered by Amazon are larger than the Go store, characterized by being convenience-style, say people familiar with this situation.

During November, the technology team at Amazon approved the opening of multifunction, large stores with pickup capability at curbside, which cleared the way to begin planning and hiring, according to the same sources.

Two prototype locations for drive-thru, which do not offer an option of in-store shopping, are slated as well to open over the next couple of weeks in the city of Seattle, Washington, claimed sources.

Amazon sees itself opening over 2,000 grocery stores that are brick and mortar, which will depend on the test locations’ success,

In comparison, Kroger operates over 2,800 stores in 35 states. Adding in grocery pickup will be a big incentive for shoppers as they will not have to shop but can still take part in enjoying the low prices.

These developments make up Project Como’s next step. The project is the plan Amazon has to capture additional food sales, opening the door to one of the key driver’s of spending by consumers that would help to broaden the e-commerce giant’s growing dominance in retail.

The opening of the stores will also help the company compete better with its rivals like Walmart and Target. Walmart is planning to expand its service that allows shoppers to make an online order and pickup it up at curbside in over 1,000 stores by the end of 2017.

Amazon up to now had centered its strategy for groceries around its Amazon Fresh, a subscription service that has quick delivery of foodstuffs from online orders.

However, the delivering of all groceries is complex logistically, requiring quick delivery for the cold items in large orders on routes that are less profitable, where stops can be spread out.

Many consumers prefer to touch, pick out and smell the fresh items such as vegetables and fruits.

Online purchases represent approximately 1% of the more than $674 billion market of edible groceries across the U.S., showed data released by Kantar Retail.

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