Rest in peace, Amazon’s convenience store is gone and will probably soon be forgotten.
Amazon announced Tuesday that it will close its brick-and-mortar Amazon Go and Amazon Fresh stores and instead expand its same-day grocery delivery capabilities and Whole Foods Market locations.
These stores were used to grow Amazon’s cashierless Just Walk Out technology, which tracks which items customers pick up and allows them to pay for groceries without a more formal checkout process. The company is instead focused on providing its technology to third parties, such as concession stands at sports stadiums.
“While we have seen some bright spots with Amazon-branded physical grocery stores, we have yet to create a truly distinctive customer experience with the right economic model needed to scale at scale,” the company said in a blog post.
These retail store closures do not affect customers who use Amazon for grocery delivery.
It’s no surprise that Amazon is moving away from private-label retail, given that the company has been reducing its brick-and-mortar presence in recent years. An Amazon spokesperson said the company is “not financially viable on lease costs” when it closes some stores in 2024.
However, Amazon hasn’t given up on the brick-and-mortar side of its business. Instead, they accept the fact that people have a stronger brand affinity with Whole Foods Market than with Amazon Go convenience stores.
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Amazon plans to open more than 100 new Whole Foods stores over the next few years. Since Whole Foods was acquired by Amazon in 2017, sales have increased by more than 40% and the company has expanded to 550 stores, the company said.
Amazon also plans to open more Whole Foods Market Dairy Shop stores, smaller versions of grocery stores focused on convenience and grab-and-go meals. These seem similar to the idea behind Amazon Go and Amazon Fresh stores, but even though they’re the same company, people will probably find it better to buy a salad at Whole Foods than at an Amazon Fresh store.
