September 14, 2021
8 min read

How Grocers Can Compete with Amazon: A Firsthand Review and Analysis of Amazon Fresh

How Grocers Can Compete with Amazon: A Firsthand Review and Analysis of Amazon Fresh https://www.pexels.com/photo/time-lapse-photography-of-blue-lights-373543/

It's no secret that Amazon is becoming increasingly prominent in the retail landscape, particularly within the grocery sector. The retailer recently announced the use of its new Just Walk Out technology, which is poised to innovate and further automate the grocery experience.

While we already discussed the pros and cons of this advanced technology, GK Software USA CEO Michael Jaszczyk made a trip to an Amazon Fresh store to take a closer look. After experiencing the technology that had 76% of shoppers wanting to return, Michael provided key takeaways for retailers based on his experience.  

Let's dive into what differentiates Amazon Fresh, the advantages customers gain with an automated store and the investments other grocers should embrace to best compete with the retail giant.

 

The in-store experience with Amazon Fresh

The Amazon Fresh store is bigger than you might expect, according to Michael. The full-sized supermarket is designed to automate the normal experience, so all a shopper has to worry about is grabbing the items they want to buy. The shopping cart is equipped with four cameras and a display facing the consumer. Upon entering, Michael was asked by an associate to log into the Amazon app, then link it to the cart via a barcode scanner. This identifies the shopper and locks them in with the cart. Next, the shopper goes about their regular grocery shopping journey, adding items to the cart as they browse. In doing so, the cameras identify the items and put them in their virtual shopping basket, charging for items through the Amazon account once the shopper leave the store.

 

How Amazon Fresh differs from the traditional grocery store

Other than the smart cart, Amazon Fresh resembles the average grocery store with a few notable exceptions, the first being that Amazon Fresh functions primarily as a fulfillment center. For every shopper in the store, Michael observed about five or six Amazon employees picking orders for customers who preferred a delivery order.

Another key difference is the shelving strategy. Traditional retailers often steer clear of half-empty shelves as it can turn customers away and decrease sales. On the contrary, Michael explained that many of the shelves appeared understocked.

 

Customers benefit from the experimental experience

Despite challenges of working with experimental technology, the unique store brings new benefits to consumers. For instance, the Amazon Fresh shopper journey can start at home, where shoppers can build a grocery list from their personal device, then see it displayed in the cart via the app. With an automated list and no need for a checkout line, the speed of the experience is up to the consumer.

Once in the store, the primary benefits are speed, convenience and a lack of friction. The entire shopper journey can be done alone, without associate help, cashier lines or any other point of physical contact, leading to a safe, contactless trip.

 

Affordable innovations for traditional grocers

Every retailer is looking for ways to compete with Amazon today, and for many, a first glance at the costs associated with innovations at Amazon Fresh may seem intimidating. Michael explained that Amazon's current model is very expensive to set up and maintain. With hundreds of cameras covering every angle of the store in the Amazon Go concept and each cart holding thousands of dollars of technology in the amazon fresh stores, a single broken element could cost the retailer significantly.

For traditional grocers, innovations such as intelligent tap and go, smart shelf labels, or mobile scanners are more technically and financially stable. They also still provide the needed innovation customers are looking for today. Additionally, there are options that incorporate apps, like the sign-in required at Amazon Fresh, and options that can be used on a mobile device without the need to download an app, eliminating potential barriers of usage for customers.

Solutions like GK's Mobile POS can create efficiencies by turning employee tablets and smartphones into modern point-of-sale devices with innovative clienteling concepts. That way, customers can check out where and when it's most convenient. Similar to how Amazon Fresh incorporated digital shopping lists into the experience, GK Omni-Channel Personalization can create custom-made shopping lists for customers using targeted data and analytics.

For stores with a wider breadth of services that include quick-service restaurants or fuel pumps, CLOUD4RETAIL OmniPOS 5.19 can offer innovations to add customer value. These are just a few ways to create a fast, convenient, and frictionless experience without elevating the operational costs beyond their value.

 

Offering the benefits of Amazon Fresh without the overhaul

Interested in learning more? Reach out to us today to see how cost-effective and easy-to-implement solutions from GK Software can help your store stand up to Amazon and offer the same benefits to customers with less hassle.