Amazon announced a new strategy for its grocery services today, which includes closing all of its physical Amazon Go and Amazon Fresh locations and focusing on the expansion of Whole Foods Market Daily Shop.
The move will impact over 70 locations, with some getting converted to Whole Foods Market stores. Customers can continue to shop Amazon Fresh online in participating locations, to have groceries delivered.
“While we’ve seen encouraging signals in our Amazon-branded physical grocery stores, we haven’t yet created a truly distinctive customer experience with the right economic model needed for large-scale expansion,” the company shared in a blog post Tuesday.
Amazon Fresh first started in 2007 as a an invite-only grocery delivery service in Seattle. In 2020, the online retailer launched the Amazon Fresh grocery store, combining online and in-store grocery shopping in limited areas. The stores featured cashier-free checkouts with the Amazon Dash Cart which used a touchscreen, scanners, and sensors to detect items put in and taken out of carts, allowing customers to just walk out, rather than going through a checkout line.
Amazon has since brought that “Just Walk Out” technology over 360 third-party locations across five countries. In Tuesday’s blog post, Amazon said the “customer impact has been transformative, from reducing cafeteria wait times from 25 to just 3 minutes at BayCare’s St. Joseph’s Hospital, to enabling sports fans at Scotiabank Arena to grab concessions in 30 seconds.” The company will continue expanding that technology and developing new ideas to make shopping more convenient.
While and Amazon Fresh and Amazon Go locations are closing, this isn’t the end of Amazon’s physical store presence. The company is continuing to test ideas like the Amazon Grocery experience in Chicago and a “store within a store” concept in Plymouth Meeting, Pennsylvania.
As we reported earlier this month, Amazon is also planning a new supercenter physical retail store that will include a wide variety of items including fresh groceries, household essentials, and general merchandise.