RetailTechNews’ weekly Amazon Watch brings you some of the company’s biggest moves from the past seven days, analysing how the giant is revolutionising the retail space. In this week’s edition: Amazon Key will leave consumers asking privacy questions; Amazon's low revenue from physical stores; and Lower fees on cheaper products boosts Amazon’s grocery offering.

Amazon Key will leave consumers asking privacy questions

Amazon have shaken up the delivery and security industries, with the launch of their new Amazon Key. The new development combines an app, home security camera (Cloud Cam), and a smart lock, (which couriers will be able to unlock via the app once they have confirmed the package's arrival).

While Google already has a foot in the home security market, with its Nest Cam, and companies such as August having designed camera smart locks, Amazon’s customer reach gives them an instant advantage when it comes to deliveries. The question consumers considering using the services will be asking themselves is whether the convenience of not having to be present to have a parcel delivered, offsets the potential risk of allowing the deliverer access to their home.

If consumers want the convenience at the cost of the risk, it will represent a further shift away from brick and mortar stores, with the new technology making the process of shopping online even more seamless. It is likely we will see retailers and delivery services partnering with Amazon, so their packages can be delivered with Amazon Key, too. If they do not, shoppers may well start buying exclusively from sites which enable Amazon Key delivery.

Amazon's low revenue from physical stores

It’s not all fun and games for Amazon, however. Their brick and mortar stores are making almost zero revenue, according to their latest earnings.

Evidently, their online offerings are over-performing and detracting sales from their own stores, because out of roughly USD$1.3bn (£1bn) in sales from brick and mortar stores, all of this was generated by Whole Foods.

The company has invested a lot of money in physical stores recently, with the majority of development on book stores, and pop-up shops. However, with results like these, it looks as though this investment may be short-lived.

A possible sign that Amazon is already looking to move away from this idea, is their recent upgrade of their cheapest Kindle, to enable users to listen to audio books. It seems counter intuitive to be investing in book stores, while at the same time giving customers greater options to purchase books online. Amazon have previously stated that these stores are not just a place to sell books, but also a chance for them to showcase their hardware devices, meaning we may not see backtracking just yet.

Lower fees on cheaper products boosts Amazon’s grocery offering

Amazon have told businesses who sell non-perishable grocery items on their platform that it is lowering the fee it charges them on items priced at USD$15 (£11.28) or less. Amazon previously charged 15% on all grocery items, but will now charge only 8% on the lower-priced goods for at least the next year.

Although this move won’t turn as many heads as the purchase of Whole Foods earlier this year, it does show long-term intent in the grocery industry. Amazon is still looking to make headway in the grocery market, and this lower pricepoint for grocers is most likely a way to attract new sellers.

It is a challenge for grocers to make a margin on lower-priced products; and with main competitor Walmart charging 10% on its subsidiary Jet.com, this looks like a move to undercut the competition and further their interest in the food market at the same time.

The move will increase consumer choice on Amazon’s platforms, but likely take traffic away from smaller online grocery platforms, who cannot afford to offer the same discounts to customers. It is likely they will focus on higher priced, premium items as they look to stay afloat.