What would 3,000 AmazonGo stores do to the U.S. retail landscape?
Amazon.com has taken a slow and steady approach to rolling out its AmazonGo cashier-less stores since opening the first location in Seattle back in January. That may soon change, however, if Amazon CEO Jeff Bezos gives the go-ahead to a plan to open 3,000 Go locations by 2021, according to sources familiar with the situation that spoke with Bloomberg.
Mr. Bezos believes that AmazonGo can be the brick and mortar answer to end “meal-time logjams” in cities across the country, according to Bloomberg’s reporting. Rapid expansion of the concept seems both implausible and obtainable at the same time considering Amazon is behind it.
Amazon conducted nearly 14 months of live testing with its own employees before opening its first cashier-less store in Seattle to the public earlier this. Since then it has opened two additional Go stores in Seattle, along with another this week in Chicago. Additional locations are in the works for New York and San Francisco with Amazon looking to have 10 stores operating by the end of the year. Amazon has set a target of having 50 stores operating in major metropolitan areas by the end of 2019.
The concept continues to be a work in progress. Amazon is deciding whether Go locations will work better as places where consumers go to pick up salads, sandwiches and snacks for quick meals or if they should be more akin to convenience stores that offer prepared foods along with small grocery sections.
While AmazonGo stores are small — typically only a couple thousand square feet — the cost of opening each location is relatively high because of the technology required to make the cashier-less concept work. Narrowing the concept to just grab and go meal options, for example, could help reduce operating costs as would concentrating a number of stores in an area, served by central commissaries and/or distribution centers.
As has been the case in the past with Amazon’s Whole Foods and PillPack acquisitions, retail rivals saw their share prices drop after Bloomberg’s reporting went public. CVS, Kroger, Target, Walgreens and Walmart all moved lower on the news Amazon was considering a major ramp up of Go.
Amazon refused to comment on the report.
- Amazon Will Consider Opening Up to 3,000 Cashierless Stores by 2021 – Bloomberg
- Amazon is considering opening as many as 3,000 cashierless stores by 2021, report says – CNBC
- Amazon Go goes live – RetailWire
DISCUSSION QUESTIONS: What do you see as the biggest challenges facing Amazon and its competitors if Bloomberg’s reporting proves true? Do you expect AmazonGo to develop as a grab and go meal concept or more similar to traditional convenience stores?