One source involved in the launch of Amazon’s Fresh stores in the UK says that technology enabling shoppers to avoid cashiers is simply not much of a draw. “From my perspective, I just think it doesn’t work. They offered the Just Walk Out technology as a point of convenience and a quick shop and it’s a bit of a quirk… but is that what people want?”
The source says that Amazon should have paid more attention to the traditional rules of retail. “They’re not established as a brand, they don’t have the supply chain, they don’t have the same backing as the biggest supermarkets. They’re a disrupter in a market that isn’t really disruptable.”
In the UK, Amazon has expanded to open 20 Fresh stores, all in London, although it closed three last year. The stores rely on the same Just Walk Out technology Amazon is winding down in the US, but also feature physical tills, in a sign of the difficulty the company has had changing consumer habits. Clive Black, an analyst at Shore Capital, says it would need to make a Whole Foods-esque acquisition to really make a dent in the market.
“Its progress in the grocery market has not been a straight-line success,” he says. “One can question, despite much huffing and puffing and the acquisition of Whole Foods, whether much progress has been made at all.”
Other bricks and mortar offerings from Amazon have also fallen away too. In 2018, it opened a chain of “4 star” stores, named because they would only sell items that had Amazon review scores of four stars or higher. Shelves had electronic price tags that updated real-time review information and allowed the company to offer discounts to Prime subscribers.
Jon Reily, a former Amazon executive who worked on the 4-star stores and is now an executive at the digital consultancy Bounteous, says the stores were introduced to gather data that could improve Amazon’s own website. “They wanted to learn how people acted in the real world. And whether that was different to how they act in the digital world.”
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