Amy Luu recently used her Prime membership to scan into an Amazon Fresh grocery shop in Washington, D.C. She proceeded through an electronic gate, took one avocado, and then walked out without paying at the cashier. Amazon emailed her a receipt immediately after she left the store after her purchases were observed by cameras.
Even though she lives only two streets away, Luu rarely purchases at Amazon Fresh, despite the convenience. She stated that she likes to shop at the neighborhood Safeway and farmers market. Luu claimed, “I didn’t normally come inside Amazon, but I did because I was lazy. There is too much supervision, thus I don’t really like the system.
The latest indication of Amazon’s challenges to differentiate itself in the crowded supermarket market was last week’s layoffs at its physical grocery shops.bGroceries are actually Amazon’s last unexplored growth opportunity, according to Jordan Berke, CEO of Tomorrow Retail Consulting. The biggest retail segment in which Amazon has had difficulty competing is clothing.
Market Heats Up
One of Amazon’s difficulties with groceries is technology. According to Cornell Tech professor Karan Girotra, the Amazon Fresh job losses highlight Amazon’s inability to draw customers and gain a competitive advantage through its automated shopping experience.
At the moment, Amazon is “just another regular grocery retailer among all the other grocery retailers out there,” according to Arun Sundaram, a research analyst at CFRA Research. Jessica Martin, an Amazon spokesman, would like to say how many employees were impacted by the recent layoffs, although The Washington Post claimed that hundreds of people lost their jobs. Martin said Amazon is evaluating the Fresh locations’ “organizational needs.”
The company’s Just Walk Out technology is used at more than half of the Amazon Fresh locations in the United States. Customers may completely skip the checkout line since store cameras track what they grab and send them a receipt after they leave. Amazon also runs more than 20 Amazon Go convenience stores without cash registers.