Amazon is the 800 pound gorilla of online retail, but that doesn’t mean the company believes other channels have no value to its business.
Several years ago, Amazon unveiled Amazon Lockers, which make it easy for its customers to avoid missed deliveries and pick up their purchases from nearby locations.
Now comes a report that the company may be planning to build a drive-up grocery store in Silicon Valley.
According to Silicon Valley Business Journal, Amazon is likely the entity behind a proposed 11,600 square foot store to be located in Sunnyvale.
As Silicon Valley Business Journal’s Nathan Donato-Weinstein points out, a drive-up concept makes sense in the context of the company’s grocery efforts:
For Amazon, a standalone drive-up store would signal a new phase in the company’s evolving grocery ambitions. AmazonFresh, Amazon’s same- and next-day grocery delivery service, has been expanding into major metropolitan areas in recent years.
A physical pickup spot could help solve the “last mile” problem of getting perishable goods to consumers by having consumers come to Amazon.
Nicole Santosuosso, an analyst at Kanta Retail, also believes that the proposed development could be aligned with Amazon’s business. ”Amazon’s entire value proposition is based on this idea of immediacy, and getting items to the shopper as quickly as possible,” she explained. “I could see something like this being tied into that overall value proposition.”
May the best customer experience win
Amazon faces significant competition in the grocery space. Google, through Google Express, is active in the space, and upstarts like Instacart have raised significant amounts of money.
Not surprisingly, large established players, like Walmart and Safeway, have their own delivery and curbside pickup initiatives.
As a result, if Amazon is behind the proposed store in Sunnyvale, it is unlikely to find overnight success. But analysts suggest that the company’s prowess, particularly around logistics, could make it a formidable competitor.
If Amazon can target the right consumers, and focus on the right products, it could make an even bigger splash in the grocery market sooner than one might expect.
Ultimately, all of the companies in the space are trying to identify the optimal customer experience. The good news for companies like Amazon is that there might be multiple customer experiences that win.
The face of grocery shopping is changing, and in the near future, it may become commonplace for consumers to use a variety of channels and services to stock their pantries.