Brick-and-mortar proves to be a challenge for Amazon

The company’s automated Fresh stores aren’t doing as well as the Whole Foods stores the company acquired in 2017.

By Shelly BrisbinAugust 3, 2023 1:56 pm, ,

Amazon set records last month on Prime Day, racking in $12.7 billion in sales during the annual online event. But things are not going so smoothly in other parts of Amazon’s empire.

The company is struggling to make a success of its brick-and-mortar stores – Amazon Fresh and Amazon Go – despite what it has learned about the grocery business after acquiring Austin-based Whole Foods a few years ago. 

And now the company plans to overhaul those real-world stores. Tech expert Omar Gallaga says Amazon is slowing its expansion plans for the stores and making changes to those that are already open. 

Highlights from this segment:

– Amazon announced during a recent earnings call that it would not be opening new Amazon Fresh stores in the near-future. The company later announced changes to existing stores, including the addition of some human cashiers who will be better able to solve technical issues in the previously fully-automated stores. 

– During the pandemic, Amazon’s stores attracted customers who were wary of encountering large numbers of people. Since the crisis has eased, more shoppers are choosing other stores, where human interaction is part of the shopping experience. 

– The company faces a number of lawsuits from property owners who expected Amazon stores to open in their retail spaces, but have not.

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