Experts Weigh In On Amazon's Decision to Open Convenience Stores

By Tim Denman — October 17, 2016

It was widely reported last week that Amazon is planning to further its commitment to physical retailing with the opening of a chain of convenience stores and curbside pickup locations nationwide.

According to the Wall Street Journal Amazon plans to "build small brick-and-mortar stores that would sell produce, milk, meats and other perishable items that customers can take home. Primarily using their mobile phones or, possibly, touch screens around the store, customers could also order peanut butter, cereal and other goods with longer shelf lives for same-day delivery."

While the additional revenue opportunity is certainly attractive for the e-commerce giant, operating in the physical world is a departure from the retailer's core strength and is not a guaranteed home run. Below four industry experts share their thoughts on Amazon's plans:

  • "Amazon’s plans to launch convenience stores to sell perishable items is certainly a bold move, but one that should be considered and executed carefully. Staying on top of perishable items can be an arduous task, even for the largest of retailers. Food waste is still an ongoing concern, but can be controlled through dynamic pricing initiatives that encourage shoppers to purchase those items before they spoil." — Paul Milner, marketing director, Displaydata
  • Traditional grocers should take note of Amazon's move but not panic. Today's grocers have a head start, we think they should stay calm and focus on their own omnichannel experience and rely on the brand equity they have built with their local communities. This is an opportunity for traditional grocers to improve their omnichannel offering; a seamless digital and physical shopping experience that is personalized and flexible to customers who want to shop online, in-store, or everything in between."— Dan Farmer, VP retail solutions, Unata
  • "It’s here. The moment that a lot of grocery chains have been dreading has arrived and although it’s a small start, the signs are ominous. Grocery chains that don't move now to usher in the new era of retail will be left behind in a few years. Leveraging customer data, improving personalization, mobile centricity and building efficiencies into in-store experiences are the only options for those who want to survive in this new reality. This is just a warning shot from Amazon. Of course there are tens of thousands of supermarkets, and I don't mean to spell gloom and doom, but future is evident and early movers will be the only ones to prosper in this new tomorrow. Supermarkets who build deeper relationships with their communities, get smarter with their data and build strategic partnerships to stay in the technology game are sure to weather this change. Game on." — Shekar Raman, co-founder and CEO, Birdzi
  • "Amazon has done its homework on the growth of ‘fresh,’ the desire of consumers to select produce and the driving home market. Amazon will have to differentiate to compete with C-stores such as 7-Eleven, Cumberland Farms and QuikTrip with their advantage of forecourt gas traffic generators and significant advances in fresh.  Pay-at-the-pump technology and mobile order ahead will enable these C-stores to quickly test adding SKUs and trunk delivery while customers are filling up. To differentiate itself from C-stores and grocers, new entrants should look less at why consumers don't like buying produce online or why they claim they aren't using click and collect, and more at what consumers already are doing for dinner tonight and on the way home." — Babs Ryan, grocery and retail customer behavioral expert, ThoughtWorks Retail


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