Shopping While Surveilled? Amazon Fresh Gets Tested

Shopping While Surveilled? Amazon Fresh Gets Tested

Imagine it's 9 PM on a Sunday and you're eating a bag of "Mother's Mythical Creatures" (think those pink and white circus animal cookies, but now with sparkles!) No you don't have a terrible palette, you're kicking the tires on the latest edition of Amazon Fresh, the retail behemoth's growing grocery concept.

Amazon first started building out its branded chain of grocery stores in late 2020, in the LA neighborhood of Woodland Hills. Notably, that store was built fron the ground up, and it (and most subsequent stores) featured "Dash Carts" - think a plastic shopping cart with a bunch of cameras, sensors, and a tablet glued on - giving shoppers an instantaneous estimate of their bill, and letting them check out without making another stop by a cashier.

What made this just-opened Amazon Fresh worth stopping in for, was that it was actually one of the company's first in California to not feature a Dash Cart (which they're now slowly rolling out to Whole Foods as well.) Instead, it featured "Just Walk Out" technology, as seen in their earlier Amazon Go convenience concept, and is now being licensed to other retailers like Hudson.

Walking in to the store in Encino, you notice two things. One - the music / lighting is not quite the same as your average supermarket, seemingly for the worse. And two - there are cameras... a whole lot of cameras. Like, the amount of cameras you would install if this were a surrealist prank making fun of Amazon's panoptic ambitions...

What struck me as most odd was that for all this privacy reduction and labor destruction, there weren't a whole lot of consumer benefits. I suppose if you only do your shopping on Saturday afternoons, you may appreciate saving a few minutes not waiting for a cashier, but for most shoppers that time advantage is going to be marginal. And while the SKUs were certainly cheaper at this store than they would be at a Whole Foods, the savings were pretty small compared to a regular grocer. My (admittedly non statistically significant) cart consisted of five items totaling $12.89. The grocery store I visited was previously flagged as a Ralph's, so let's use that Kroger-owned market as a point of comparison. This same basket would have set me back $14.25 at the traditional market, with most items actually being cheaper at Ralph's, but with Amazon winning big on the price of a box of cat treats.

Is being "about the same price" good enough for Amazon? Will they draw foot traffic because they also offer an easy place to manage returns (as well as a weird little section full of Amazon Echos and other odd "best sellers"?) One could also argue that Amazon is still learning and tweaking, before it takes Amazon Fresh nationwide. Southern California is known for being one of the most competitive grocery markets in the country - just ask wounded giants like Tesco or Yucaipa what they've learned from past failures, or try to recreate the magic of Trader Joe's or 151 year old Smart & Final - so maybe Bezos and Co are simply battle testing their concept.

From my vantage point, their new-build stores make more sense in term of competitive advantages; they can construct them with a delivery-centric footprint in mind, while any additional in-store shopping simply needs to break-even. After all, hundreds of pickers and packers armed with barcode guns are still faster and more accurate than a ceiling full of cameras. I learned this the hard way... when I picked up a plum, Amazon charged me an extra 10 cents because it thought I plucked a peach. As always, Bezos gets the last laugh!

HOT INDUSTRY NEWS & GOSSIP

You're invited to two complimentary industry meet-ups next week! Get to know your peers and learn about the latest in curb, mobility, and delivery advancements next Thursday. In Seattle, we're partnering with our friends at Open Mobility Foundation and Urban Freight Lab; register now. And in Santa Monica, we're taking part in a16z's LA Tech Week, along with our partners Fetcha, Thirst Trap Cocktails, and Aero X Ventures. Register now - or reply to this email if you have some cool technology you'd like to display.

7-Eleven skips the line... Well this is a huge shot across the bow in the delivery wars; 7-Eleven buys delivery driver network Skipcart - tapping into 100,000 drivers that'll pair nicely with the convenience chain's nationwide footprint. While this ups the competitive pressure on Gopuff, it's worth noting that this came hot off the heels of Doordash announcing a widening quarterly loss.

Delivery retrenches worldwide: The past week wasn't kind to folks working for deliverers of all types. In Brazil, logistics unicorn Loggi (backed by Softbank, naturally) cut back 15 percent of its workforce, and installed a new CEO. In Italy, Domino's is abandoning the country entirely. You might think the absurd proposition of selling Domino's pizza (and pizza-like substances) to Italians was the culprit, but locals had initially been receptive; what killed the concept was that neighborhood pizzerias finally started offering delivery of their own, after the pandemic took a bite out of sit-down sales. And back in the ol' USA, REEF and Wendy's significantly scaled back their partnership, cutting their plans to build out ghost kitchen burger trailers by about 500 locations.

But it's not all bad news! That said, there is some good news from the world of delivery. Instacart, Kroger, and Unilever announced a new partnership, launching a series of delivery-only virtual brands. And it must be back to school season already, because Kiwibot just rolled out 500+ delivery bots to 26 campuses, as the upstart brand overtakes Starship Technologies to have the most universities under contract. Plus, Tortoise's delivery bots seem to be making a splash in Walmart parking lots.

Safen up your streets... The cash is there, if your community has the political will to act boldly! StreetsBlog lays out how to tap into new federal programs to build safe and complete streets. Meanwhile, US DOT showers $2.2 billion in RAISE grants to projects nationwide, including Inglewood's People Mover, and BRT in the Motor City. And Charlotte passes a new strategic mobility plan, with a focus on smart curb management and active transportation.

A musky aroma? It was a big week for the transportation world's bête noire... A new book highlights many of Elon Musk's missteps, including the claim that he never had any serious intentions of building the Hyperloop, he merely wanted to derail California's high speed rail project. Meanwhile, Alissa Walker of Curbed pokes holes in many of the Boring Company's suspicious claims. Elon fans have responded with their usual cool detachment... offering to throw their children in front of self-driving Teslas to prove their loyalty, of course.

The new fight for 15? Seattle joins San Francisco in fee capping delivery services at 15% of order value, albeit with some exceptions for additional services.

Building the built environment... Curious why contemporary American cities look the way they do? This illuminating Twitter discourse between a developer, a think-tanker, and a planner shows how hidden incentives and disincentives (ADA compliance, inspection times, etc) can result in prime urban land going underutilized. Meanwhile, the State of California is going after San Francisco for not approving housing quickly enough. And if you want some good news - here's an example of the private market creating affordable housing for college students, even in a high-cost environment like LA.

Two cool jobs: calling all Colorado curb courtiers, the city of Colorado Springs is looking to hire a Multimodal Division Manager. And Amazon is looking for a transportation policy manager.

Links, links, links! NYC MTA hunts for new revenue, hoping to avoid a ridership death spiral. Gopuff shares its secret business sauce. Looks like people are still hungry and ready to hit the road - July's jobs report blows past expectations, with 74,000 of the 528,000 new positions coming from the restaurant and hospitality sector, and 21,000 coming from transportation. The nuances of the IRA's EV battery regulations. Fourth place delivery network Waitr rebrands as ASAP. CA Senate holds parking reform in limbo, yet again. Vade's vehicular vision. Robotaxis hit Wuhan and Chongqing. Want people on your streets? Take a cue from the late, great Claes Oldenburg and give them something worth looking at...

See you in Seattle or Santa Monica!
-  Jonah Bliss & The Curbivore Crew