[Updated 5/26/22 to include new releases]
[Updated 2/28/2020 to include Amazon Go (now Amazon Fresh)]
Amazon made another big move into physical retail with the launch of the world’s first cashier-less grocery store. It’s safe to say that, after years of toe-dipping, Amazon is finally making their long-awaited splash into brick-and-mortar. While many anticipated that Whole Foods would be the proverbial cannonball, it’s actually innovative concepts such as Amazon Go, 4-Star Stores, and Pop-Ups that represent the eCommerce giant’s strategic direction. These concepts were set to expand and evolve rapidly in 2020. For most, it will be a point of fascination. For some brands, however, there exists real opportunity to team up with Amazon and put themselves on the cutting edge of retail.
Before I cover how, here’s a look at all of Amazon physical retail types:
Well known for its innovative cashier-less model, Amazon Go offers “Just Walk Out Shopping” in small urban locations. The stores feature a selection of ready-to-eat products and freshly prepared foods ideal for customers who value time and convenience.
To enter the store, customers scan a QR code on their Amazon Go app. They then collect their items for purchase, walk out the door, and within seconds the items are charged to their Amazon account.
Amazon says that the cashier-less experience is made possible by “the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning.” As you collect items off shelves, a virtual cart keeps track. Yes, you can put items back on shelves, jump up and down, do everything in your power to trick the system…it doesn’t work (we’ve tried it all).
Overall, the Amazon Go concept has been a major success and can now be found in 26 locations across Seattle, Chicago, San Francisco, and New York City.
In early 2019, Amazon closed down nearly 90 of its “Pop-Up” locations in malls across the country. These stores were kiosks that sold Amazon-brand products such as Alexa devices. Since then, a new retail concept (originally called “Presented by Amazon”) has taken the Amazon Pop-Up name and now offers “themed” merchandise from “top brands” in six locations across six states.
As of March 2022, Amazon announced closure of all Pop Up locations.
Since Amazon started as an online book store, it should be no surprise that one of their first (and most successful) physical retail concepts is Amazon Book Stores. The stores offer curated books based on customer reviews as well as top sellers and new releases. Amazon Prime members pay “the same low Prime price they pay on Amazon.com,” and non-Prime members are offered free trials in store. In addition to books, the stores sell Amazon Alexa devices and smart home accessories.
As of March 2022, Amazon announced closure of all book stores.
In late 2018, Amazon opened its first physical retail store dedicated to showcasing products that are loved by customers on the eCommerce site. They called them Amazon 4-Star Stores because every product featured is “rated 4 stars and above, is a top seller, or is new and trending.” Like Amazon Book Stores, Prime members only pay “Amazon.com prices” for all products.
In some sections of Amazon 4-Star Stores, products from multiple categories are shelved side-by-side. This results in a unique customer experience centered around discovery rather than convenience. It also makes the stores a hit for gift purchasing.
In another novel mix between online and in-person shopping, customers can see actual online reviews for some products beside their price tag.
As of March 2022, Amazon announced closure of all 4-star stores.
Perhaps the most adventurous of Amazon’s physical retail concepts is the Treasure Truck. Much like it sounds, the Treasure Truck is a small mobile store that offers exclusive deals on individual products.
Customers can enroll to receive text messages when the Treasure Truck is offering a deal. From there, they can view the deal and find out where the truck will be traveling that day. If interested in purchasing the product, customers can select a location and meet the truck to make their purchase.
Treasure Truck is in most major cities across the United States on a “never-ending quest to bring treasure to customers.”
Expanding their cashier-less Amazon Go stores into a full grocery concept, Amazon unveiled Amazon Fresh (previously Amazon Go Grocery) in early 2020. The first location opened up in Seattle (about 4 blocks from our office) and operates in just over 10,000 square feet. That is four times the size of the Amazon Go concept. Featuring fresh produce, frozen items, and everything else you’d expect to see at a grocery store, Amazon Go Grocery is sure to disrupt the grocery industry. Customers get to skip the lines, receive their receipts digitally, and purchase produce by the unit rather than the pound.
There are now 29 Amazon Fresh stores across six states.
Brands who are interested in being involved with Amazon physical retail are sure to have more opportunities to drive the conversation this year. Though brands should also keep in mind that these opportunities may not be product sales/ROI positive from a dollars or time standpoint. Rather if you are a brand who has seen success with exposure-based initiatives, you could have massive success building your brand on the cutting edge of retail.
Specifically, there will be more Amazon Pop-Up Stores across the country focused on specific brands or product verticals. If you are a leader in a category, these might be worth pursuing. There will also be an increase in merchandising opportunities at Amazon Go and 4-Star Stores as they continue to build out more locations and work more directly with brands on these initiatives. Treasure Truck is also likely to expand into new formats, taking the mobility concept to new formats like kiosks and small pop-ups featuring a single brand or item.
The key to getting involved with Amazon physical retail, regardless of the format, is for brands to stay engaged with Amazon and make themselves seen. Leveraging current relationships with Amazon or teaming up with an Amazon agency can prove effective in elevating your brand’s status and expediting your contact channels.
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