Los Angeles | Amazon Fresh is Amazon’s second stationary supermarket concept alongside Whole Foods. While the nationwide expansion has slowed down, Amazon is testing unusual displays and retail media in existing stores. An invidis site inspection.
The Amazon Fresh supermarket in the north of Los Angeles is located in the immediate vicinity of a Kohl’s store, one of the larger supermarket chains in the USA. From the outside, the two concepts hardly differ, but inside Amazon is showing its digital DNA.
Digital signage at the entrance to supermarkets and screens suspended from the ceiling is hardly an innovation, also Amazon Fresh builds at first glance on established signage concepts. However, the automized content, basic screen design and the reference to the local store’s shelf section are unique. Not necessarily pleasing on the eye but data-driven and store accurate.
The additional information “Sponsored Content” is very unusual for instore retail media and most likely a sign how online and instore retail media are based on the same data set and creatives.
Amazon is generating more than 40bn USD retail media revenues annually, leading the industry by a huge margin over second ranking Walmart. More than 90% of retail media is mobile and online based, just a few percentage points are generated in stationary retail. As Amazon is operating only 500+ Whole Foods and 50+ Amazon Fresh stores, instore retail media at Amazon is clearly derived from online.
Instore Automation
Anyone who enters this Amazon Fresh supermarket will experience best in class data-driven instore retail media. Amazon won’t win a design award with the content, but the graphic elements, description, price display and shelf number have obviously been put together fully automatically. The dots at the end of the description text are well known from online stores.
Apparently, Amazon does not consider it necessary to adapt the texts for in-store. The in-house Amazon AI can certainly take over this in the future. The online giant from Seattle saves on the text, but not on the advertising labeling. The reference to sponsored content on a digital signage screen in a supermarket is at least unusual.
Double-sided digital category signage
For the first time, we discovered digital category flags in a supermarket – double-sided 15.6″ LCD displays that show the product areas. The displays with Android SOC installed at Amazon Fresh come from Lenovo’s affiliated company Instorescreens from Florida. The business model of category flags is easy to understand – an additional retail media revenue stream.
While visiting the store, one aisle of displays were incorrectly assigned signposting and promoting cleaning products instead of cookies. A classic digital signage fail that really shouldn’t happen if the local branch management is trained.
But at Amazon Fresh, digitalization is a top priority – on the ceiling there are large-format QR codes installed in a checkerboard pattern, like those used for self-driving robots in logistics. It’s hardly surprising that Amazon is bringing the experience gained in distribution centers to stationary retail. We couldn’t spot any robots during opening hours, but use cases such as automatic stock control are likely.
Stretched displays on the product carrier
Stretched displays adjacent to the direction of travel on the upper product carriers are less convincing. The 48″ Incap screens, also from Instorescreen, are highly reflective and the content is difficult to read in the aisles. During our site inspection, Amazon only advertised its own brands.
The screens had a better effect when installed on shelves at the end of an aisle. The strong reflection and the smaller display area compared to the 16:9 screens suspended from the ceiling are not very convincing.
ESL in full use
Amazon Fresh was one of the first retailers to fit out 100% of their stores with electronic shelf labels. ESL’s are not only used for dynamic prices but also for Prime discounts and package specials (Buy 3 – get 1 free). At Amazon Fresh, the retailer is making full use of all pricing and content opportunities provided by coloured ESL.
Conclusion
The Amazon Fresh supermarket concept has not been a success so far; the eCommerce giant actually wanted to be present in many regions across the USA by now. But the complex regional logistics and competition from the large, established supermarket chains have so far prevented a major expansion.
But in the existing branches, digitization is more advanced than almost anywhere else. From digital shopping carts with automatic detection to category flag displays and robots – a visit to an Amazon Fresh branch is always worth for digital signage and retail media insiders.
