November 18, 2016

Amazon Fresh builds pick-up store in Seattle

US eagle with a burden (photo: passengerz/Fotolia)
Eagle has landed (photo: passengerz/Fotolia)
It's certainly counter-intuitive. Amazon has become big and brawny through being mean and lean. While traditional bricks & mortar retailers remain encumbered with their physical store bases, the US online giant has soared through cyber space like an eagle. So why is Amazon Fresh going offline in Seattle and experimenting with a drive-in?

Could the tech star be on the verge of clipping its prime competitive advantage? Or is the project just another laudable example of the way US companies fearlessly progress by trial & error?

Meanwhile, retailers can only hope Amazon doesn't conclude that they charge far too much for their often grim customer service and depressing store ambience.

As there is no point in asking the secretive and opaque behemoth for more information about its ultimate intentions, let's take a sneak peek at what exactly the company is building in its home town.

The lucky colleague who got to go and have a look was none other than Olaf Kolbrück, the creative mind behind e.tailment. In Ballard, one of the hipper quarters in boom town Seattle, he found a 900m² store with a wooden facade and a goods delivery door painted in Amazon Fresh's bright green corporate colour.

Amazon Fresh's pick-up store in Seattle (photo: Olaf Kolbrück, Etailment)
Let's get physical: Amazon Fresh's first pick-up store in Seattle (photo: Olaf Kolbrück, Etailment)
The site is well-located near a busy freeway with an even busier Starbucks just a stone's throw away. What Geekwire discovered as "Project X" in August, will clearly be opening for business soon although the building still doesn't bear a name yet. According to plans the US news service claims to have in its possession, online orders can be collected within a timeframe of 15 minutes to two hours.

During opening times from 7 a.m. to 10 p.m., customers can use the adjacent car park or have orders brought to their car. A maximum of 15 employees will have to move quickly, though, says Michael Lierow, retail consultant at Oliver Wyman, because there are only a dozen parking spaces and the maximum waiting time is only five minutes.

Customers might also be able to enter the store and order goods on tablet devices, which would obviously generate additional impulse purchases. Lierow can't see a store of this size offering a full supermarket assortment with fresh produce. But he can imagine popular lines such as the latest Harry Potter, smartphones and headsets as well as typical take-away items including batteries, confectionary, drinks and ice cream.

Limited storage space also means that it will not be possible to carry the whole Amazon Fresh range with its three temperature bands. Doubtless the new drive-in will be serviced by an adjacent depot, hence the bright-green truck delivery gate on the side of the building. Big spaces that have obviously been reserved for advertising look as though they are going to be used for communicating special offers.

Amazon Fresh delivery box (photo: Olaf Kolbrück)
How green was my company: The facade of Amazon Fresh's first pick-up store in Seattle is painted in the same corporate colour as its delivery boxes (photo: Olaf Kolbrück)
According to US media reports, Amazon plans to open only 20 food outlets by 2018, divided equally between mini-supermarkets and pick-up stores. It is claimed, however, that CEO Jeff Bezos has already realised the benefits of scale in physical retailing and would be prepared to open as many as 2,000 Amazon Fresh branches if he can get the maths right.

At the end of the day, this is just one of the many routes Amazon is taking to the consumer. But bricks & mortar retailers throughout the world will surely be praying that the US company doesn't get too good at running physical stores.

So what's next in life's endless catalogue of surprises? Perhaps Amazon will form a new subsidiary for the prevention of international tax evasion or enter into a joint venture with local tax authorities?

Podcast microphone (photo: Gerhard Seybert-Fotolia)
(photo: Gerhard Seybert-Fotolia)

Podcast. Click arrow to listen to an audio version of the text:

Lebensmittel Zeitung with digital sister (photo: LZ)
Our German B2B newspaper, Lebensmittel Zeitung, in print & digital
Read in German: "Frisch aus Seattle" by news editors Olaf Kolbrück & Birgitt Loderhose on page 30,
Lebensmittel Zeitung, no. 46, 18.11.2016

German Retail Blog

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