Amazon has announced that it’s planning to open at least 3,000 new cashier-less convenience stores in the US by 2021. According to Bloomberg, the stores that are known as Amazon Go represent a big step by the e-commerce giant to establish a presence in the offline retail market. Amazon has been taking aggressive steps to develop an offline retail infrastructure over the last few years. The company started off this campaign with the acquisition of Whole Foods in a multibillion-dollar deal.
The current aggressive plan to open 3,000 cashier-less stores is yet another clear indication that the e-commerce giant sees a lot of value in having a physical presence on the ground. Amazon is looking to compete with convenience stores like 7-Eleven and CVS as well as the big-box dominant retail giants like Target and Walmart.
The Amazon Go stores will be fully automated and will use sensors to allow customer entry, shopping, and check out without having to wait in line to pay. Amazon began piloting this idea in 2016 after it opened the first Amazon Go in Seattle. The e-commerce platform has taken its time though with the pilot. The aim has been to carefully study the model in Seattle and get as much feedback as possible before rolling out the stores nationwide.
The second Go store didn’t open until last month in Seattle. This shows just how careful Amazon has been with the roll out just to make sure that it gets everything right. Another Go store is also opening this week in Chicago, and it will be the first Go store outside the city of Seattle, where Amazon’s headquarters are located. The e-commerce platform is planning to open more of these stores in Chicago and San Francisco later this year and at the start of 2019.
It’s not clear yet though the kind of ambition that Amazon has with the cashier-less stores. There’s no doubt that the first thing is to offer customers the option of a high-tech shopping experience. However, there are reports that the e-commerce giant could also offer freshly made and packaged food through Go locations. This could put Amazon in direct competition with fast food restaurants around the country.
The Bloomberg report notes that this could be a strategic play if Amazon decides to go with it. It argues that offering freshly made food on the Go stores will have a significant impact on enhancing the profit margins on individual locations. This means that Amazon will have enough cash to open more stores, and the expansion could be very quick.
Big-box retailers are not taking the news well. For instance, Target and Walmart stocks, two of the largest big-box retailers in the US, started to fall as soon as this news was first announced. It’s now very clear that Amazon is going after the brick-and-mortar retail market in a big way. Its superior technology and innovation is a massive edge that could help the company eat into this industry very quickly and in a short period of time.