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Amazon's California Grocery Store Off To Strong Start: Retail Data Firm

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Amazon's California Grocery Store Off To Strong Start: Retail Data Firm

Retail giant Amazon.com, Inc. (NASDAQ: AMZN) opened its first Amazon Fresh grocery store in Woodland Hills, California in September, and it's off to a "very impressive" start, according to location analytics company Placer.ai.

Strong Start: Amazon's California grocery store generated foot traffic on par with rival grocers Trader Joe's and Ralphs during its first week, according to Placer.ai.

The Amazon store "quickly burst ahead" and drove more than 5,000 visits per week compared to its peers over the next five weeks, the firm said. 

Amazon generated a positive first-time experience and customers wanted to return to its stores. In fact, visitors made two each since the store opened, and this compares favorably to a nearby Sprouts Farmers Market Inc (NASDAQ: SFM) that generated 1.7 visits per visitor over the same time period, Placer.ai said. 

Ralphs led the group with 2.4 visits per visitor, followed by Trader Joe's at 2.2 visits per visitor.

Related Link: Ex-Undercover Amazon Fresh Driver: 'Much More Lurking' Behind The Scenes For Grocery Delivery

Is It Sustainable?: Amazon's impressive start in the physical grocery space begs the question of whether the momentum is sustainable or merely part of the initial hype and excitement.

But the fact that Amazon showed visit metrics that are consistent with its rivals suggests the e-commerce giant is succeeding in convincing shoppers. 

The COVID-19 pandemic has resulted in a shift in buying behavior, as traditional grocers are accessible on the way home from work or school.

Amazon could leverage its large data to add more locations in the direction of key commutes if this strategy is warranted.

Otherwise, Amazon could open new locations that are in very close proximity to where its core customers live to "more effectively leverage proximity," according to Placer.ai.

 

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