Amazon to Open its Own Grocery Store in 2020

Amazon.com has begun hiring for a new grocery store that’s slated to open next year in a neighborhood of Los Angeles. The store is located in Woodland Hills, according to a job posting on Amazon’s website. It’s the first location of what's expected to be a new chain of grocery stores launched by Amazon. The new store isn’t expected to use cashierless technology like what's used in Amazon Go stores. Instead, it will have a conventional checkout, the company noted. Last month, The Wall Street Journal reported that Amazon had signed more than a dozen leases in the Los Angeles area as part of its plan to build out a new grocery chain separate from its Whole Foods business.

Total Retail's Take: This is confirmation of news that has been circulating for some time now. Amazon's entry into the grocery sector, separate from its Whole Foods stores, raises some interesting questions for businesses already in the category.

"Amazon’s move into traditional grocery should both strike fear into and motivate traditional grocers," says Jon Reily, head of global commerce strategy at Publicis Sapient. "No longer is the question of whether Amazon will enter the space an if or a when, it’s a now, and grocers that don’t rise to the challenge, and quickly, may find themselves fighting to keep their customers when the next Amazon Grocery opens down the street.

"Another group that should be concerned is traditional advertisers. Amazon’s grocery ambitions are about more than selling peaches and milk; it’s about learning more about a cohort it doesn’t know much about now: the non-Prime member. By moving out of its traditional swimming lane, Amazon stands to gain boatloads of valuable marketing data, which will not only help its e-commerce business, but its quickly growing advertising empire as well.

"It will take Amazon a decade to get a return on the investment of opening and operating dozens if not hundreds of physical stores, but the data it will gain will be priceless and worth every penny."