Amazon Fresh is opening a grocery store in Bellevue, Washington on Thursday, June 17 that will offer customers the chance to grab and go without standing in line at a checkout lane.
The launch is the latest in a grocery technology war that is making a trip to the store for milk, bread, and eggs a digitally advanced experience.
The newest Amazon Fresh grocery store will feature the company’s “Just Walk Out” technology that allows shoppers to place things in their cart and leave the store without a stop at the cash register to pay the bill.
Instead, shoppers can wave their palms, scan a QR code in the Amazon AMZN, -0.02% app, or use a credit or debit card upon entry. Customers repeat the mode of payment on their way out the door and receive a digital receipt on their Amazon account.
Along the way, shoppers can move about the store as they normally would at any grocer. Amazon’s technology, which combines sensors, “deep learning” and “computer vision,” can keep track of items added to or removed from a cart.
Shoppers who want the traditional grocery store experience can opt for that, and pay using a card, cash, SNAP EBT, or a code from the Amazon app.
“Bringing Just Walk Out technology to a full-size grocery space with the Amazon Fresh store in Bellevue showcases the technology’s continued ability to scale and adapt to new environments and selection,” said Dilip Kumar, vice president of physical retail and technology at Amazon, in a statement.
Amazon has been opening Go stores nationwide, licensing the technology, and adding the “pay-by-palm” option over recent years.
The new Bellevue Amazon Fresh store will be stocked with fruit, meat, prepared foods, and all the other items one would find in a traditional grocery store.
The first Amazon Fresh store opened in August 2020 and now there are more than a dozen across California, Illinois, and Virginia.
Retailers in the grocery space are increasingly using technology to enhance customer service options and get a leg up on the competition.
Kroger Co. KR, -1.38% and its partner Ocado Group PLC opened a high-tech fulfillment center in April that has more than 1,000 bots working alongside human staff.
And Walmart Inc. WMT, -0.40% will be piloting self-checkouts in stores this summer, including one in Terrace, British Columbia.
“One of the new initiatives we will be testing later this summer in a handful of stores – including in Terrace – is offering 100% self-checkout by removing the traditional ‘belted’ checkout lanes,” Walmart said in a statement sent to MarketWatch.
“Our customers have embraced self-checkouts as they’ve rolled out across the country over the past few years. We’ve also been enhancing the self-checkout lanes by having larger kiosk areas so customers have more space to organize and layout their purchases.”
Walmart began experimenting with this technology in the U.S. last summer.
“Over the years we’ve heard concerns that self-checkouts will impact jobs but that’s simply not the case,” the Walmart statement said.
“The self-checkout area will be staffed by dedicated associates to help our customers and there will be no job loss as a result of this change. In fact, our Terrace store is hiring for more than 40 jobs including roles in omnichannel, as we’re launching online grocery at this store in the coming months.”
UBS analysts estimated in a May report that Amazon accounted for just 2.8% of U.S. grocery industry sales in 2020 but forecasts its share could rise to 5.7% by 2025.
“Now, between the sharp rise in online grocery penetration, Amazon’s learnings from Whole Foods Market, and the opening of its initial 12 Fresh, conventional grocery locations, we think its share is set to sharply increase,” analysts wrote.
“Given the valuable data it has on Prime members, it can use this to best determine where it locates stores and how to stock them with an inventory. If Amazon can roll out 200 locations per year and achieve sales productivity in line with Kroger, it would add $5 billion in annual sales.”
UBS rates Amazon stock buy with a $4,350 price target.
Amazon stock has gained 3.8% for the year to date. Kroger is up 19%. And Walmart is down nearly 3%.