Hands-on: Amazon Fresh grocery stores tease brick-and-mortar retail’s future
October 31, 2020
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by admin

There were no lines outside Irvine, California’s new Amazon Fresh grocery store on its opening day last week, despite the fact that it was only the second such location in the world — and the first to be open to the public on day one. But after early visitors discovered the store’s high-tech shopping carts, two lines formed over the weekend, stretching past Amazon’s front doors to adjacent retailers in the suburban plaza. One line was longer and moving slower than the other.

“Do you want to try the Dash Cart?” an employee asked people near the end of the queue. “If not, you can move into the shorter line, and you’ll get in faster.”

We were there specifically for the Dash Cart: Friends told us that it was worth the 10- to 20-minute wait to go hands-on with one of the 25 magical shopping carts, since their integrated touchscreens and cameras were the key to Amazon’s next-generation shopping experience. The Dash Cart felt like the future of brick-and-mortar retail, they said, even though the rest of the store wasn’t that amazing.

Our friends were correct, but there’s more to the Amazon Fresh story than just Dash Carts. Here’s what it’s like to visit the supermarket of the future, today, as it’s been dreamed up and implemented by Amazon.

A boxy, spartan layout, seemingly by design

Unlike Whole Foods, the high-end supermarket chain Amazon acquired in 2017, Amazon Fresh stores look like small warehouses, and have all the charm of Walmart’s grocery sections, minus two-thirds the people and half the choices. From the signage to the aisles and specialty counters, Amazon’s latest store feels as if it was designed largely by engineers, and conceived to be as easy as possible to retrofit inside another retailer’s abandoned space — in this case, the 40,000 feet formerly occupied by a Babies R Us store.

Apart from the produce, nothing about the environment feels organic: Floors are spartan, displays are boxy, and everything looks to have been optimized for customers by computers, rather than humans. There are places to purchase whole cooked chickens for $4.97 and pizzas for $8.99, but nowhere to sit and eat them. A staffed customer service area is in the back, not the front, which instead allocates a lot of interior space to managing shopping carts.

Even the baked goods, which in other stores flow attractively off the edges of store shelves, seem to have been assigned to a specific corner of Amazon Fresh and told to stay firmly within the lines. If it wasn’t for a cadre of friendly greeters, walking through Amazon Fresh would feel more like visiting a warehouse or Costco than shopping in a typical supermarket of its size.

That feeling extends to how Amazon Fresh uses — and doesn’t use — people in its operations. Instead of having employees answer inventory-related questions, Amazon scatters Alexa terminals throughout the store, offering AI guidance on item locations, wine pairings, and measurement unit conversions. On our first visit, the Alexa terminals were both working and helpful, accurately pointing us towards items we wanted to locate. But on our second visit, all of the terminals were experiencing “connectivity issues,” perhaps the closest Amazon Fresh stores will get to a business-disrupting employee strike.

The Alexa terminals suggest that Amazon wants to staff Fresh stores as leanly as possible, even if it’s liberally using employees during the launch phase to address potential customer pain points. There were lots of Fresh staffers — too many, really — constantly restocking shelves while otherwise keeping to themselves, plus the aforementioned greeters at the front doors to help get people in and out of the store. In traditional supermarkets, all of these employees might be floaters who move from place to place as needed, alternating between helping customers and restocking shelves. But at Amazon Fresh, Alexa could help reduce the need for greeters as customers become familiar with the technology, and shelving recalibrations could reduce the need for such frequent stock replenishment.

Lower labor costs could translate directly into lower prices. And half of the new store’s appeal is reasonable pricing — that’s the single biggest problem with Whole Foods, which offers well-heeled customers an impressive selection of high-end foods and beverages that just aren’t affordable to the masses. By contrast, Amazon Fresh is clearly aimed at middle-income shoppers who still want to do some of their purchasing and browsing in person instead of on a computer screen. There are a handful of fancy items on the shelves, such as $10 pints of McConnell’s ice cream, but most of the signage is directed towards selling 15-cent bananas and 89-cent loaves of bread, rather than champagne and caviar.

Dash Cart as a solution and a problem

The more exciting part of Amazon Fresh is the Dash Cart, a shopping cart that uses sensors and smartphone technology to replace checkout lanes and standalone produce scales. As mentioned above, you don’t have to use a Dash Cart to shop at Amazon Fresh, and despite its speedy name, you’ll likely get in and out of the store faster without waiting for one. But without a Dash Cart, the shopping experience isn’t hugely different from any old small suburban supermarket you’ve previously visited.

Once you make it through the Dash Cart waiting line, you’ll get a three-minute human tutorial that explains how to link your cart to your Amazon app with a QR code, scan packaged items by dropping them into one of two included paper bags, and add produce items by inputting four-digit PLU codes into the cart’s tablet screen. These steps are supposed to eliminate the need for employees to check you out and bag your purchases; instead, the cart’s cameras and scale track everything you place in the bags, so when you leave the store, your Amazon account is automatically charged for whatever you bagged yourself. It’s an evolution of what Amazon pioneered with much smaller Amazon Go stores years ago.

Dash Carts are cool in concept, but their execution leaves a lot to be desired. On a positive note, their cameras and software did a good job with accurately scanning items we placed in the bags, and automatically removing items if we pulled them from the cart. The tablet-like touchscreen worked as expected, and though the scale inside the cart wasn’t fast, it could — with practice — be faster than walking over to a standalone produce scale and printing out a label for each item.

On the other hand, the Dash Carts had limitations that beg to be resolved in future iterations. Each cart is limited to two bags, which restricts your ability to complete a full shopping trip, and limits Amazon’s maximum take per shopper. You can’t overfill the bags, lest the cart’s cameras become incapable of seeing what’s inside. Additionally, Amazon is so concerned about theft or damage that it swaps each Dash Cart for a regular one before customers leave for the parking lot, or hands you the bags to carry to whatever distant parking space you selected. These are the sorts of practical inconveniences that could kill Dash Cart’s utility for some people.

Real-world glitches also undermined our Dash Cart experience. One of our bags ripped and needed to be replaced during the cart-to-cart transfer. We also had to go through a manual checkout line — including rescanning and rebagging every item — because our cart’s integrated code scanner couldn’t recognize an Amazon coupon. Staff said that the carts were somewhat finicky and had been experiencing hiccups like this.

Whenever one of these issues with the Dash Cart popped up, we felt as if we were holding up people who were waiting behind us, even though the issues weren’t really our fault. Other delays, such as learning how to enter PLU codes and weigh produce, caused Dash Cart users to abruptly stop mid-aisle and fidget with the tablet’s screen. We noticed some customers without the high-tech carts becoming visibly frustrated with other customers’ Dash-inspired touch interactions, but cart users seemed to be too focused on their screens to notice.

Could data make all the difference for future retailers?

It’s easy to overlook a key element of this retail experience — the intersection between Amazon.com and Amazon Fresh — because it’s so muddled at the moment. But it could wind up being a critical differentiator for Amazon’s brick-and-mortar ventures going forward.

As part of the initial onboarding experience, Amazon openly encourages Dash Cart users to digitally manage their shopping lists with the cart and browse current in-store specials using their phones. This is a mess for two reasons: The cart’s integrated shopping list management software is extremely limited, and the idea of asking users to check not just one but two touchscreens while they’re shopping is just straight-out crazy. No one wants to be stuck behind that guy who’s blocking shelves or freezers while browsing through lists and brochures. If Larry David ever visits Amazon Fresh, there’s enough material here for an entire Curb Your Enthusiasm sub-plot.

Yet there’s obvious value in tying the internet directly — and more thoughtfully — to a customer’s shopping cart. Your first visit to an Amazon Fresh store could conceivably be your last trip through its aisles: Amazon could just present you with a list of the items you purchased, offer to reorder them, and make them instantly available for either pickup or delivery. That could eliminate the need (and the premium people currently pay) for Instacart. It also could reduce the footprints of future Amazon Fresh stores by lowering the number of people who simultaneously walk through them, enabling many customers to complete transactions using the equivalent of drive-through windows.

Amazon is technically doing some if not most of these things already, but it needs to refine its smartphone and cart software to make the end-to-end experience intuitive and frictionless for customers. Somewhat ironically, the sign that it has succeeded will be if its Fresh grocery stores aren’t packed with people but are still hugely profitable, which is to say that they’ll be moving tons of products without the packed aisles and long lines normally associated with successful supermarkets.

The best of the rest of Amazon, plus coupons

One thing we loved at Amazon Fresh was an area labeled “Customer Service, Returns & Pick Up.” Normally, these things are found very close to the entrance of a supermarket, but at Amazon Fresh, they’re in the back, a decision that was likely made to get returns and pick-ups closer to the store’s storage areas and loading docks. Customers can pick up items from Amazon lockers and drop off Amazon returns — conveniences that simultaneously provide an incentive to do grocery shopping while eliminating the need to visit standalone Amazon shipping and return locations, something we can see ourselves using at least occasionally.

Amazon Fresh also includes a limited selection of the online retailer’s popular gadgets and books. We spotted the José Andrés cookbook Vegetables Unleashed and the Death & Co. cocktail guide on shelves only a short distance away from Fire tablets and Echo speakers, none of which we were looking to purchase at a supermarket — but then, we had already bought some of them online in the past. Over time, new items will replace them, and we might have reason to consider buying non-grocery goods at Amazon Fresh, as well.

At this stage, it would be hard to describe Amazon Fresh as the guaranteed future of brick-and-mortar retailing; the experience currently feels closer to a public beta test than a fully formed and polished business. Visitors can certainly have a normal or even a unique experience in the store, but they’re actually guinea pigs in a grand experiment that runs smoothly — until it doesn’t.

To Amazon’s credit, the speed bumps aren’t too daunting. Moreover, the company is actively addressing problems by handing out coupons to apologize for technical issues, and on one of our two visits, was giving away free cans of sparkling water and refrigerator magnets to everyone exiting the store. Despite the glitches, we didn’t see anyone leaving the store angry, and between the coupons and the small number of bags we left with, we were already planning our next trip to the store as we walked out to our car.

Only Amazon knows whether such a mixed but positive impression counts as “mission accomplished” or whether its early Amazon Fresh grocery customers are just helping it refine a larger campaign to completely dominate the retail world. Thanks to Amazon’s growing scale and unquestionable ambition, the Fresh grocery stores could either become very real challengers to traditional supermarkets — or fizzle out as experiments that made little difference to the company’s bottom line.

If you’re interested in seeing Amazon Fresh for yourself, you can visit the new store at 13672 Jamboree Road in Irvine, or the first location — open to the public since September — at 6245 Topanga Canyon Boulevard in Woodland Hills, California. Both stores are open from 7 a.m. to 10 p.m., seven days a week.

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