For decades, drive-thrus have served up everything from coffee to prescriptions to dry cleaning — not to mention burgers and fries. Now Amazon.com Inc. wants to add another item to the list: Your groceries, according to the Silicon Valley Business Journal.
The e-commerce giant is developing a new drive-up store concept in Silicon Valley that will allow consumers to order grocery items online, then schedule a pickup at a dedicated facility, according to industry sources familiar with Amazon’s plans. If confirmed, the project could signal a new distribution strategy for Amazon, the world’s biggest online retailer, while adding an additional threat to a grocery industry already in the throes of change.
The first location is Sunnyvale, where a real estate developer submitted plans for a 11,600-square-foot building and grocery pickup area.
Editors Insight: This move surprises no one who has been paying attention to Amazon’s expansion into the food business. Amazon recognizes that food is an essential part of gaining retail dominance and in the last year it has introduced several initiatives to support food e-commerce, such as introducing food delivery to more markets and offering faster delivery.
Anyone who follows food e-commerce knows that serious players are integrating pickup stations in addition to providing delivery to homes and businesses. To be successful, food e-commerce has to give customers the ability to get food when and where they want it.
E-commerce has moved slower in the food industry than some other industries, but it is progressing and it poses one of the biggest challenges ever to for the food and beverage supply chain. Food companies have to have more powerful supply chain tools in order to compete in a more fragmented retail landscape. All serious food and beverage companies are increasing their investment in supply chain resources.
Tired of hearing about Amazon? Too bad. The headline in today’s Wall Street Journal reads “Amazon Delivers Surprise Profit.” The improving financial performance is forcing the business community to pay closer attention to what Amazon is doing, and the ramifications for the supply chain can’t be underestimated. The Wall Street Journal notes that Amazon is taking over package delivery from the largest carriers and has managed to use robotics in tis warehouses to lower costs. Amazon competitors won’t be ignoring any of this.
And what does today’s report on grocery pickup stores tell us? For one thing, e-commerce doesn’t spell the end of physical stores. This isn’t the first time Amazon announced plans for a physical store for pickups. Late last year, Food Logistics reported plans for a such a store in New York City. 7-24-15 By Elliot Maras