Amazon this morning offered the first official glimpse of a new “store within a store” concept it’s testing to bring name-brand items to Whole Foods Market without sullying the grocer’s signature organic vibe.
The approach, first reported a few days ago by The Wall Street Journal, puts screens on the shelves that let shoppers scan a QR code to browse a wider Amazon selection in the app — picking items like Kraft Mac & Cheese, Tide Pods, or Pepsi for quick pickup at a nearby counter after they check out.
Behind the scenes, a 10,000-square-foot automated “micro-fulfillment center” inside the store uses robots to pull items from Amazon’s expanded inventory: popular snacks, cleaning supplies, frozen foods, personal care products, etc.
The system, built on technology from Silicon Valley startup Fulfil, prepares orders within minutes so they’re ready for customers by the time they finish shopping.
It’s one of the tightest integrations between Amazon and Whole Foods since the tech giant bought the grocer for $13.7 billion in 2017. Under Whole Foods CEO Jason Buechel, who now oversees all of Amazon’s grocery stores, the company is looking to bring more of its tech expertise to a brand known for its strict ingredient standards and natural-foods identity.
Amazon has been trying to figure out the broader grocery business for 18 years, dating back to the original launch of Amazon Fresh delivery in the Seattle area in 2007. Thin margins and huge volumes make grocery one of the toughest and most tantalizing segments in retail.
The company has reported recent success with an initiative that offers perishable groceries for free same-day delivery as part of a unified cart when people check out on Amazon.com. CEO Andy Jassy called this approach a “game changer” on the company’s earnings call last week.
As part of its Whole Foods announcement this morning, Amazon confirmed that it’s testing the new concept at a store in Plymouth Meeting, Pa., and said for the first time that it plans to expand the approach to additional Whole Foods locations after gathering feedback.
It’s not the only concept currently in testing. The Wall Street Journal also reported on a separate trial in Chicago where Amazon replaced a coffee shop in the flagship Whole Foods’ lobby with a 3,800-square-foot “Amazon Grocery” kiosk to sell brands like Doritos and Chips Ahoy.
