Why Amazon is closing its Go and Fresh physical stores
What's the story
Amazon has announced plans to close all of its physical Amazon Go and Amazon Fresh stores. The decision comes as part of the company's strategy to focus more on same-day grocery delivery and expand its Whole Foods Market footprint. The move comes despite the fact that these stores were key to developing Amazon's cashierless Just Walk Out technology, which tracks items picked by customers for a seamless payment process.
Strategic pivot
Amazon's shift in retail strategy
In a blog post, Amazon explained its decision to close the stores. The company said, "While we've seen encouraging signals in our Amazon-branded physical grocery stores, we haven't yet created a truly distinctive customer experience with the right economic model needed for large-scale expansion." This closure won't affect customers using Amazon for grocery delivery services.
Expansion strategy
Future plans for physical stores
Despite the closures, Amazon isn't abandoning its brick-and-mortar business. The company plans to open over 100 new Whole Foods stores in the coming years. This comes after Whole Foods saw more than 40% sales growth and expansion to 550 stores since Amazon acquired it in 2017. Also, more Whole Foods Market Daily Shop locations will be opened, smaller grocery stores focusing on convenience and ready-to-eat meals.
Delivery growth
Amazon's grocery delivery service expansion
Amazon is also expanding its grocery delivery service to 5,000 US cities and towns. The firm plans to expand its same-day delivery of fresh groceries based on strong customer feedback. This move comes as more shoppers are turning to online delivery for everyday essentials.