Friday, May 20, 2022

Amazon debuts on physical store in London


However, the ecommerce giant has headed to west London’s Ealing rather than the West End

Amazon, known for clicks, is eyeing physical stores, at a time when numerous chains are looking to exit some sites as a result of the pandemic, and due to high costs associated with operating branches.

But Amazon hasn’t chosen London’s famous shopping destination for its debut physical grocery store in the UK.

Rather than the West End, the ecommerce giant has headed to west London’s Ealing. The company has agreed a letting with FTSE 100 landlord British Land for 2500 square feet of space where it will sell meat, fish, fruit and vegetbles and other groceries.

The Amazon Fresh site marks a less conventional high street retail model for the UK: shoppers can a use a smartphone app when entering, bag items as they go along, and walk away without using a till. They are automatically billed as they leave.

In fact, more of these sites could be on the way.

Matt Birch, director of Amazon Fresh Stores UK, says: We’re excited to be launching our first store outside of North America in London. We hope to open a few more in London in areas like Ealing and believe it will work in residential areas and city centres.

As Birch puts it, a “few more” sites are hoped for, so let us not get carried away and imagine empty department stores could soon be full of the web giant’s goods. But, its investment may make some rivals look at stepping up their game on the high street.

Daniel Kornitzer, chief business development officer at online payments company Paysafe, says: As the UK high street continues to grapple with the impact of Covid-19 and plans for a return to in-store shopping later this year, retailers will need to follow suit and leverage technology such as this to deliver more sophisticated experiences that meet consumer demand in a post-pandemic world.

Shore Capital analyst Clive Black says: The key innovation to the outlet is not necessarily what it sells but the way that it does so; this Fresh store is likely to be cash and card less and so it is the payment method that is somewhat revolutionary for the British scene, albeit this is now well set in the USA where Amazon trades from over twenty-five grocery outlets. Cameras and digitisation are to the fore. It will clearly be most interesting to see how this feature pans out in the UK.

If the new shop is successful, it is possible Amazon’s move might encourage other food, or non-food, businesses to look at investing in new stores and tech that could entice more customers.

KPMG’s UK head of retail Paul Martin does not envisage many conventional high street brands, such as in the clothing and jewellery categories, will be looking to swoop on empty shops.

Martin thinks landlords, many of which have seen rental income plunge during the coronavirus crisis, will gladly “welcome new innovators to their spaces”.

He adds: With consumers wanting safety and convenience from their high street experience, along with the huge move to online shopping, it makes sense that more spaces previously used for purely retail will now need to adapt to accommodate online shoppers.


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