Food Herman Yung Food Herman Yung

The long game that Amazon is playing with Amazon Go grocery stores

You may have heard that Amazon is launching grocery stores with no lines. That's cool and all, but Nerdwriter argues that this is just the tip of the iceberg with a new sales strategy for Amazon that may eventually mimic the distribution and licensing deals they have with Amazon Web Services.

It makes sense if this is the way Amazon will go. Sure, they might build a few Amazon Go-branded stores, but the real profit-maker here for them might actually be to perfect the no-checkout grocery store set up through their technology and sell that technology to grocery stores already built. The costs for Amazon would most likely be less than building a store from the ground up and the profits for Amazon and the other grocery store chains will probably increase.

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Food Herman Yung Food Herman Yung

Amazon is launching physical grocery stores with no checkout lines

Amazon is introducing Amazon Go, a new grocery store experience that does away with check out lines completely. The entire process acts like a real-life Amazon website shopping cart and keeps an on-going tab of things you pick up in the cart until you walk out of the store. No need to pause at a register. Just walk out and go.

There is currently a beta of this program operating in Seattle, WA at 2131 7th Ave and it is only open to Amazon employees at the moment as they get the program running smoothly. This is going to change my life when it goes full throttle to the public.

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Food Herman Yung Food Herman Yung

How stores choose which products go on grocery store shelves

I forget where I heard about this originally, but it's always good to revisit the pros and cons of the grocery store slotting fees that dictate what products go on grocery store shelves (and also how much of that product takes up shelf space). It's a war purely based on squeezing profits from more than just product sales and I've always felt like it allows big companies with inferior tasting product to sell more compared to a smaller but better tasting alternative that might not have as much capital to pay chain stores. Vox does a much better job explaining.

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Herman Yung Herman Yung

How Grocery Stores Are Cleverly Designed to Make You Spend More Money

I feel like I read about some of this stuff when I read Barry Schwartz's Paradox of Choice a few years back. So it wasn't a complete surprise to me to know that grocery stores have a specific pattern and layout to encourage the buyer to purchase the highest amount of goods per trip. It's not too different from the things I've heard about American mall layouts and how escalators and elevators are often positioned opposite or far from each other so that customers have to walk past other things to get to their intended destination.

I do wonder though if online sales of groceries have hit these grocery stores hard. With Fresh Direct and Amazon groceries, do online product recommendations translate to the same dollar amount sales as perfect aisle placement?


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