“Amazon is a frugal company,” said John Rossman, a former executive with the company who is a managing director with Alvarez & Marsal, a business consulting firm. “They don’t want to be flying teams around a lot to have them be hands-on with their beta operations and experiences.”

Amazon’s Living Lab: Reimagining Retail on Seattle Streets

By Nick Wingfield — Read full article HERE

EATTLE — On a busy stretch of road in this city’s Ballard neighborhood, a curious new grocery store is taking shape — and so begins another effort by Amazon to use the residents of its hometown as guinea pigs.

Workers are finishing up a driveway with a series of parking stalls, protected from the rain by a soaring steel canopy. When the store opens, customers will buy their items online, schedule a time slot to pick them up and pull into the stalls, where employees will whisk orders to their cars, according to documents filed with the city’s planning department.

Across town in the SoDo neighborhood, another Amazon drive-up grocery store is under construction. Late last year, Amazon began testing a new convenience-store concept in Seattle, Amazon Go, that uses sensors and other technology so shoppers can check out without having to visit a cashier. And in late 2015, it opened its first physical bookstore in a shopping mall in north Seattle, before expanding to more than a half-dozen other locations around the country.

Amazon’s success in online commerce has transformed Seattle by bringing jobs, wealth and an almost insatiable appetite for office space — along with grumbling about how expensive the city is getting. At the same time, the company is putting its stamp on the city by using it as a lab for its expanding array of unconventional experiments in bricks-and-mortar retailing.

While Amazon has never articulated the grand strategy behind its expansion into physical stores, analysts and tech executives believe its goal is to capture a bigger share of some forms of shopping — food being the biggest — that may never move entirely online.

Amazon isn’t alone in using Seattle, home to Starbucks and other major retail brands, as a proving ground for new ideas in stores. But it is the main attraction among people focused on innovation in the category.

“I look at Seattle as the center of the retail universe,” said Herb Sorensen, a researcher and consultant to brands on shopping behavior, referring to Amazon’s activities in the city.

Amazon declines to talk about the drive-up grocery stores it is building here. The most obvious reason the company tries out new ideas in its own backyard is that it makes life easier for corporate leadership to see them in action without having to get on planes. Executives closely scrutinize how customers use new stores and tweak them as they gather data.

“Amazon is a frugal company,” said John Rossman, a former executive with the company who is a managing director with Alvarez & Marsal, a business consulting firm. “They don’t want to be flying teams around a lot to have them be hands-on with their beta operations and experiences.”

Amazon’s own technologically demanding employees are an important part of the feedback process. More than 25,000 of them work for the company in Seattle, and many serve as the first test cases for new concepts.

The company opened its first Amazon Go store on the ground floor of one of its office buildings, where employees can buy prepared meals, drinks and snacks. Customers enter the store through a gate with a smartphone app and simply walk out with their goods when they’re done