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Amazon opens two click-and-collect grocery stores

Elizabeth Weise
USA TODAY

SAN FRANCISCO — The future of grocery shopping opened in what once was a sleepy Scandinavian neighborhood in Seattle this week and it looks very Amazonian.

The company unveiled its long-rumored grocery pickup concept store in two Seattle locations, though for now they're only for employees as the online giant works out the kinks.

AmazonFresh Pickup locations allow Amazon Prime members to order groceries online, make an appointment to pick them up and then drive through and have the grocery bags loaded into their trunk by an Amazon employee. No money changes hands as the entire transaction takes place via the Amazon app or at home on the customer's computer.

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The two sites are in the north Seattle neighborhood of Ballard and south of downtown in an area called SoDo, called that way because it's south of the domed sports stadium that once stood there.

The AmazonFresh Pickup stores are different from Amazon's other recent brick-and-mortar concept store, the Amazon Go convenience store.

In that one, cameras, sensors and other technology tell the store which items a customer has slipped into their basket, then deduct their credit card as they leave, requiring no checkout lines. The first of these stores is located just north of downtown, near Amazon's concentration of office buildings at the south end of Lake Union.

Scheduled to open to the general public in March, it remains open only to Amazon employees at this time as Amazon discovered that the sensor technology reportedly became overwhelmed when more than 20 customers were in the store at once.

Groceries are the biggest untapped opportunity in e-commerce and it makes sense for Amazon to find ways to disrupt it, said Cooper Smith, an Amazon analyst with business intelligence company L2.

Multiple supermarket chains offer online ordering and drive through pickup, including Amazon rival Walmart.

What’s different is that Amazon has “an unprecedented installed user base of shoppers- 30 million people use Amazon’s mobile app every month. That’s how this click-and-collect it going to take off,” Smith said.

An Amazon shopper chooses grocery items on her Amazon phone app, which can be picked up at an AmazonFresh Go site within 15 minutes.

While delivery seemed the flavor of the month for groceries until recently, Amazon's order-and-pickup model answers a convenience need without some of the problems of delivery.

Grocery delivery services such as Instacart and others don’t work for everyone. Some, including Amazon's own delivery service Amazon Fresh, charge for the convenience.

Keeping customer fees low can also mean it's harder to entice drivers to work for the services. And some shoppers just don't like at-home delivery.

“People are also getting more cautious about delivery people they don’t know coming to their homes and having to wait around for the delivery to arrive,” said Phil Lempert, an analyst who studies grocery marketing and consumer trends.

A date when the AmazonFresh Pickup sites will open to regular Prime customers hasn’t been set, but business analyst Smith expects the concept to take off quickly, especially in areas with a lot of Millennial, high-earning consumers.

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