Recently Amazon opened the first store without cashiers outside the native Seattle. And now Bloomberg reports that the company is going to launch about 3000 such Amazon Go outlets by 2021. This would be Amazon’s most aggressive move to create a retail chain of stores since the purchase of Whole Foods in 2016. This would also significantly change the company’s potential off-line success in retailing, as it will have to compete with large networks like Kroger, CVS, 7-Eleven, Walmart and Target.
The first Go store, which uses sensors and software to automate, allowing customers to make purchases and ordering without interacting with people or cashiers, opened in Seattle in late 2016. Since then, Amazon carefully studied the model and was not in a hurry to move forward too quickly. The second Go shop appeared only last month, also in Seattle, and the third opened its doors in Chicago earlier this week. According to the latest job listings, this and 2019 plans to build stores in Chicago and San Francisco.
In Blomberg’s article Amazon’s ambitions for its Go stores are described much more grandiose than in the company’s previous public statements. According to these data, CEO Jeff Bezos (Jeff Bezos) wants to develop Go stores in a variety of ways. For example, for freshly packaged meals or more similar to 7-Eleven with a limited choice of dishes and ready-made products. In general, Amazon Go may well make the company a competitor, even for fast food establishments.
The Amazon Go model, despite its innovations in the field of service without cashiers and sellers, aims to be as clear and familiar to customers as possible. With the help of their Amazon account on the smartphone, users can take from the shelves any goods: sandwiches, salads, groceries and household items. Sensors and software, which is trained in the analysis of items on the shelves, update the shopping cart in real time, and payment is automatic as soon as a person leaves the store.
According to Bloomberg, if Amazon directs certain Go stores to sell packaged dishes for consumers on the go, this will increase the profits of each new outlet and accelerate the work of Amazon, since packed goods are easier to track with a limited number of sensors and cameras. Placing a few such stores near each other will help centralize food production if the stores focus on selling fresh food such as sandwiches and salads. According to reports, Amazon plans to open 10 stores by the end of the year, 50 more points in major cities next year, followed by exponential growth in 2020 and 2021, unless there are special unforeseen obstacles.
Quotations of shares of large American retail chains like Walmart and Target began to decline after the news: it becomes clear that in a few years Amazon will begin to seriously enter the traditional markets of products, restaurants and home products. Amazon already threatens these businesses, seeking delivery of products and goods for the house on the day of the order and by strengthening the links between the nationwide network of Whole Foods stores and its Prime Subscription service.