Without a doubt, one of the biggest retail technology stories of 2022 was Amazon putting the brakes on the expansion of its UK checkout-free convenience stores.
This was due to sales falling short of expectations and fit out costs being multiple times higher than with a standard location.
The slowdown came despite a key hire in Tony Hoggett to lead the e-commerce giant’s physical stores effort, bringing with him considerable grocery experience from Tesco.
Hoggett was also joined by Claire Peters who has been appointed Vice President, Worldwide Amazon Fresh, and Peter Bowrey Vice President, Amazon Fresh Store Operations.
Peters comes onboard from Woolworths Supermarkets where she served as Managing Director.
Her CV also includes a stint as Chief Operating Officer at Tesco Stores.
Bowrey, meanwhile, worked for Tesco for over 30 years across various functions and internationally. Most recently, he was Retail Director at Boots.
Impressive CVs all around.
Ultimately, however, in addition to the aforementioned Just Walk Out tech powered stores not impacting Amazon’s financials in any meaningful way, they’re now not expanding at a pace to be a needle mover any time soon.
As its omnichannel grocery competitors step up their games, Amazon needs to move beyond learning about the physical retail game.
That won’t be easy, however.
To quote Martin Heubel, an Amazon strategy consultant: “It’s expensive to get into retail and even more expensive to remain.”
In the midst of a cost-of-living crisis, customers are prioritising to save money. Even the most cutting-edge self-checkout technology won’t revert this trend in the short-term.
It will be interesting to see how Amazon tackles this state of affairs in 2023.
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