As once-powerful names such as Debenhams and Topshop exit town centres, there has been an unlikely newcomer to UK bricks-and-mortar retail – Amazon.

The online giant, which already owned the Whole Foods Market chain, is now trading under its own name after opening the doors to the first Amazon Fresh store outside the US, in west London.

Amazon Fresh, which launched in a blizzard of publicity, will no doubt be an unwelcome arrival in some quarters of retail where the Seattle powerhouse is seen as public enemy number one.

But the opening should be welcome. The store is a show of faith in bricks and mortar and town centres and is a beacon of innovation – all of that is good for retail.

The pandemic has powered online retail to new heights. In January, online accounted for 35.2% of retail spend, according to the Office for National Statistics. That was the highest on record but, nevertheless, the figure shows even in these disrupted times the key role played by stores.

It is no surprise that, despite its pureplay heritage, Amazon sees value in shops – particularly in retail’s biggest category, food, where traditional grocers still hold sway. 

The message for other retailers is surely that there is a future for good stores. That means taking inspiration from what Amazon does well and differentiating from it to emphasise factors such as advice, service, product and curation.

Similarly, as many people continue to work from home and the futures of town centres and the retailers that trade there are questioned, the touchdown of Amazon Fresh in Ealing’s Broadway shopping centre is a bet, even if a small one at 2,500 sq ft, from one of the world’s most forward-thinking retailers that such locations are not finished quite yet.

Meet the neighbours

Amazon Fresh stores UK director Matt Birch told Retail Week the inaugural branch is designed to appeal to neighbourhood shoppers – perhaps indicative of a conviction that a trend towards shopping locally may outlast the pandemic. 

More Amazon Fresh stores are planned and it will be fascinating to see what sort of locations are selected. Amazon’s choices are likely to help inform those of other retailers as they consider the ongoing relevance of their portfolios.

Using Amazon’s Just Walk Out technology, the new shop is also a clear indication of how innovation will shape the future of shopping. 

Although Amazon’s contactless approach suits socially distanced times well, it predates the pandemic. The point for other retailers is not really the extent to which the tech’s time has come but that the etailer constantly seeks to drive such innovation. 

“The technology would be unused if nobody thought the product on the shelves was worth buying”

The demise of TopshopDebenhams and others offer a stark reminder that no retailer can afford not to move with the times, constantly evaluate its formats or create new store models as shopper habits and expectations change.

Some believe Amazon Fresh is primarily a marketing vehicle designed to sell Just Walk Out technology to other retailers in the same way as it sells cloud computing services. That may form a part of its thinking but don’t bank on it. The technology would be unused if nobody thought the product on the shelves was worth buying. 

The etailer has thrown down the gauntlet by launching its By Amazon own-label food range to sell in the new store. Anecdotally, the food seems to fare well in comparison with longer-established grocers.

The appointment of Birch, a former Sainsbury’s and Central England Co-op executive, to spearhead Fresh is a sure sign of Amazon’s seriousness in creating a successful food format as part of a bigger grocery business.

If Amazon can see the value in town centre bricks and mortar, it shows there are new forms of opportunity too for those that have traditionally made it their stamping ground.

High Street Rebooted 2021

The future of UK high streets is at stake as the country emerges from the grips of the pandemic, but it’s important to understand what the consumer wants from it if they are to return in greater numbers. Read Retail Week’s High Street Rebooted report to find out what 1,000 UK consumers said.

Download your free copy of High Street Rebooted 2021 to discover: 

  • The top five retailers consumers most want to see on their high street
  • Data broken down across 12 UK regions to help store expansion planning
  • What products retailers should be selling and the prices they should be setting
  • The in-store technologies to invest in that consumers want and will drive spend
  • Expert views from Spar UK, Majestic Wine and Superdry on how to save the high street