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Amazon-Powered Shopping: The Future of Brick-and-Mortar Grocery?

by 
Ezra Carmel
 on 
January 24, 2023
Amazon-Powered Shopping: The Future of Brick-and-Mortar Grocery?

For over a century, grocery shopping has been an essential part of our daily lives. And because inflation has led many Americans to opt for more meals at home, supermarkets have become an even bigger part of our routines. But that doesn’t mean that grocery shopping has to be a dull affair. Thankfully, many exciting experiences can be found at grocery stores across the country, and perhaps the most exciting development is the infusion of technology into how we shop for food. We dove into the foot traffic data for Amazon’s brick-and-mortar grocery outlets – Amazon Fresh and Whole Foods Market – in order to see how the latest technologies have impacted visits. 

Amazon’s Grocery Gains

Amazon – a retail giant relatively new to the grocery space – launched Amazon Fresh in 2020, and the chain currently boasts over 40 locations nationwide. And in what has been a relatively challenging year for many grocers, Amazon’s brick-and-mortar grocery reach continues to grow, thanks in part to many new Amazon Fresh locations. Amazon-owned Whole Foods had a relatively strong start to the new year as well, with year-over-year (YoY) visits outperforming the overall grocery sector in the first weeks of 2023.

Amazon’s Tech Reaches Whole Foods 

True to its tech roots, Amazon Fresh’s innovations in the realm of brick-and-mortar retail are revolutionizing the way consumers shop for food. Amazon’s "Just Walk Out" shopping and the Amazon Dash Cart allow customers to pay and leave the store without passing through a cashier-manned checkout, while the company’s Amazon One palm-payment system facilitates contactless payment. Now, two Whole Foods locations (and a third-party grocer) also offer “Just Walk Out” technology, and many more Whole Foods locations are offering the option of Amazon’s palm-payment system. 

In February 2022 the first Whole Foods to employ Amazon's “Just Walk Out” technology reopened, following renovations, on Wisconsin Ave. in Washington, D.C. Comparing visit patterns at the Whole Foods location offering “Just Walk Out” technology with visit patterns to nearby stores reveals how shoppers are utilizing this new payment technology. Since the reopening, the “Just Walk Out” Whole Foods has seen a greater share of early afternoon visit times compared to nearby Whole Foods locations. Median dwell times are also lower for the “Just Walk Out” enabled store. This seems to indicate that during the mid-day grocery rush, shoppers are choosing the Whole Foods location with “Just Walk Out” technology because it means they can be in and out faster. 

Look Who’s Walking

A psychographic analysis of the “Just Walk Out” Whole Foods’ visitor base indicates that not only is this location seeing more visits than its neighboring Whole Foods – the visits seem to be coming from a particularly prized consumer segment. 

Using the Spatial.ai: PersonaLive dataset to compare residents of the True Trade Area of D.C. area Whole Foods stores reveals that the trade area of the “Just Walk Out” location has a higher percentage of #SkyHigh, #HighRisers, and #RisingProfessionals population segments. Broadly speaking, these groups are made up of relatively young, well-educated, high-income, and tech-oriented individuals – the type that would be receptive to a cutting-edge grocery shopping experience. 

Interestingly, the “Just Walk Out” Whole Foods’ trade area does not over-index for #Urbanists – consumers known to frequently discuss Whole Foods on social media, among other identifiers. In comparison to trade areas of nearby Whole Foods stores, this location is on the lower side for the percentage of residents in the #Urbanists segment. 

While Whole Foods is traditionally characterized as a health food store popular with #Urbanists, the “Just Walk Out” store is more popular among the tech-oriented population segments #SkyHigh, #HighRisers, and #RisingProfessionals. By bringing “Just Walk Out” to the chain, Amazon is expanding the Whole Foods brand and its recognition as a player in tech-powered shopping. 

Checkout the West Coast

Amazon opened its second “Just Walk Out” Whole Foods in March 2022, this time on the West Coast in Sherman Oaks, CA. This region was a logical landing spot for the next “Just Walk Out” at Whole Foods considering that Southern California already has the most Amazon Fresh locations in the country.

The second Whole Foods with “Just Walk Out” capabilities seems to be a success as well. During the second half of 2022 (Jul-Dec) its visits per square foot were larger than nearby Whole Foods locations. SoCal Whole Foods shoppers seem highly receptive to the frictionless shopping concept and it has proven itself as an efficient store format for the brand. 

A Whole Lot of Visits

Amazon is delivering the technologies born from its growing tech-driven Amazon Fresh grocery chain to the other grocer in its portfolio – Whole Foods. Location analytics shows that Whole Foods visitors are receptive to the Amazon-powered grocery experience and it’s likely that we’ll see the continued expansion of Amazon’s technologies in partnership with other brands and its own brick-and-mortar outlets. 

For updates and more retail foot traffic insights, visit Placer.ai.

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