Study Reveals Inflation’s Impact on Amazon’s Brick and Mortar Stores

We’ve been enjoying InMarket’s ongoing series of reports that derive insights from actual retail foot traffic patterns. InMarket does this by collecting its permission-based in-store foot traffic data from Comscore-verified active users. This allows them to see patterns in-store traffic and match them with current trends to produce actionable insights for marketers.

So InMarket’s latest report asks the questions of whether consumer anxiety over high prices and supply disruptions is impacting Amazon’s retail line-up. This consists of Whole Foods, Amazon Fresh, and AmazonGo.

After all, the only thing people seem to be talking about more these days than the invasion of Ukraine is the high price of…everything.

The recent rash of price hikes and supply disruptions had taken a bite out of Whole Foods’ store traffic.

According to InMarket’s data, in Q4 2021, Whole Foods saw a 15% decrease in total visits. InMarket surmises this may be a reaction to the store’s “Whole Paycheck” reputation.

“This is likely due to its generally higher grocery prices. With costs ~10-20% more than typical grocery stores, which may be increasingly unattractive to consumers looking to save money during the inflationary period,” the report says. “The increase in unique visits (+11%) may be representative of shoppers who are picking up a few items at Whole Foods but are doing the majority of grocery shopping at other chains that offer lower prices.”

Dropping Dwell Time

InMarket notes that the 9% drop in dwell time may have reflected consumers’ concerns over the Omicron variant, which was in full swing in Q4. It also noted that declining dwell time isn’t entirely a bad thing.

“Whole Foods is catching onto consumers’ preference for convenience, introducing Amazon Go’s ‘Just Walk Out’ technology at two of its locations in Q4,” the report notes. “This can further decrease dwell times as consumers avoid checkout lines.”

Just Walk Out enables shoppers to take items off the shelf and place items in a virtual cart. The items are tracked. And then when the shopper leaves (without checking out) they are charged for the basket of items.

Whole Foods saw a decline in traffic in Q4 that may reflect growing consumer price sensitivity. Source: InMarket
Convenience and Value Win the Day

Amazon’s other retail brands seemed to do better in Q4. At least in terms of store visits. Amazon Fresh, for example, saw a 58% increase in total visits and a 102% increase in unique visits. InMarket presumes this reflects Amazon Fresh’s positioning as a value option compared with Whole Foods.

“Addressing consumers’ concerns about value by offering multiple, less expensive products and brands led to a successful strategy for Amazon Fresh, as consumers continue to shop for value grocery items as prices surge,” the report said.

Amazon Fresh is also leveraging Just Walk Out. It will add the technology to six planned new stores. AmazonFresh has grown from just eight stores in Q4 2020 to 23 stores by Q4 last year.

And finally, AmazonGo, the true convenience choice of the three, did quite well in Q4. It saw growth in visits (+51%) and new visitors. The only metric that declined was in average dwell time (-13%). And again is not necessarily a negative indicator, especially for a convenience-focused brand.

AmazonGo, which pioneered the Just Walk Out model, was launched in 2018 and now has 24 locations.

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