Dive Brief:

• Amazon will soon open a 9,700-square-foot store in Seattle where customers can pick up online grocery orders within a 15-minute to 2-hour time window, according to USA Today. Customers can also order products in-store using electronic tablets, then wait in a “retail room” while their orders are filled.
• For months, the e-commerce giant has been rumored to be behind the store, which is still under construction. An application for a liquor license recently confirmed that Amazon is indeed the owner.
• Three more buildings under construction are also rumored to be Amazon stores, including another Seattle location and two in Silicon Valley. 

Dive Insight:

Amazon continues to disrupt the grocery space, adding a click-and-collect format to go along with its checkout-free supermarket, Amazon Go, and its ever-expanding e-commerce platform, Amazon Prime. 

This latest venture, known in planning documents as “Project X,” according to Geekwire and the Silicon Valley Business Journal, is another way for Amazon to deliver groceries to consumers. And it’s one that hits close to home for brick-and-mortar supermarkets, which have advanced their own click-and-collect services and see them as a competitive advantage against Amazon’s home delivery.

So how worried should grocers be? Well, one answer is not very much. The project is limited to four locations at this point, and it may not have the same store experience behind it that is at another more traditional grocery. Collect your online order from Wal-Mart or Kroger, and you can go into the store to buy anything else you might need. Amazon’s new format, in contrast, has no showroom floor — just a lot of storage space and a “retail room” where customers can wait on their orders.

On the other hand, there’s a lot that seems promising about Amazon’s new click-and-collect store. It’s built for efficiency and offers an e-commerce solution for time-pressed shoppers who prefer to pick up their groceries. The in-store ordering format is also interesting. Ironically, it's also something of a throwback to the days before self-service grocery, when store clerks would take customers’ orders, gather them from the store room and box them up.  

What grocers should be concerned about is what this new format from Amazon signals: The company is carefully probing the grocery model to see what works. Amazon Fresh, Amazon Go, and now Project X are all test balloons to find the best method — or combination of methods — to deliver groceries to consumers. Once it finds the right formula, the e-tailer will likely use its considerable capital and knowhow to quickly move upmarket.