Amazon to open 3,000 brick-and-mortar stores by 2021

[LemmingOverlrd]

Why it matters: While Amazon has ruled the e-tailer business for the past few years, physical stores represent a considerable investment which Jeff Bezos is willing to undertake for longer-term profitability.

Amazon is set to get into the convenience store business by setting up as many as 3,000 cashierless Amazon Go stores by 2021, reports Bloomberg. Amazon currently operates four such stores, three in Seattle and one in Chicago, and these are being used as trial-runs for a larger scale expansion of the business.

The company's rationale is simple: while it has developed into a massively successful enterprise, Jeff Bezos recognizes most money is still spent in brick-and-mortar stores and has devised a master to create 3,000 Amazon Go-type stores. These will provide freshly-prepared foodstuffs and a "limited grocery selection" to consumers, preferred by the affluent, urban crowd, who need only walk inside the store with a pre-installed Amazon Go app, grab the goods and walk out, to see the items charged to your account. No queues, no waiting, it says.

Bloomberg points out that the initial stores have carried a high setup cost, requiring $1 million in hardware alone, making the prospect of opening 3,000 stores a multi-billion dollar investment. However, with less staff and strictly dedicated to foodstuffs, which have a higher profitability than other retail goods, Amazon hopes to recoup the investment faster than your bog-standard food store.

As a matter of perspective, 7-eleven, the largest convenience store chain in the world operates 8,600 stores in the US, and in 2017 generated $14.33 billion in US sales alone. With 3,000 stores to its name, Amazon would stand to take a sizable bite of that pie. While opening brick-and-mortar stores seems counter-intuitive to Amazon's e-tailer DNA, we shouldn't forget that companies such as Walmart are still raking in the profits and, in that case, are valued at three times as much as Amazon.

Maybe 'popping down to the Go for a quick bite' won't sound so strange by 2021.

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https://www.techspot.com/news/76527-amazon-open-3000-brick-mortar-stores-2021.html

 

[seefizzle]

Sounds like they worked the kinks out. I work on the tech side of this industry and I know a lot of my coworkers and colleagues doubted the validity of these stores and the tech in general. Their next move is to open nearly 3 stores a day for 3 years straight. Damn. So much for it'll be a while before it takes hold.

 

[MilwaukeeMike]

I've been waiting years for a grocery store to put RFID tags on each item and/or have you scan with an app as you go and completely bypass the checkout lane.

Think how dumb it is that we take something off a shelf, put in a basket, take back out of the basket, scan it, put it in a bag, and put the bag back in the basket.

Why not take the item off the shelf, scan it yourself, and put it in your own bag that's already in your basket. Hit 'Pay' on the app when you're done.

Oh yeah - people would steal. Someday maybe.

 

[seefizzle]

I've been waiting years for a grocery store to put RFID tags on each item and/or have you scan with an app as you go and completely bypass the checkout lane.

Think how dumb it is that we take something off a shelf, put in a basket, take back out of the basket, scan it, put it in a bag, and put the bag back in the basket.

Why not take the item off the shelf, scan it yourself, and put it in your own bag that's already in your basket. Hit 'Pay' on the app when you're done.

Oh yeah - people would steal. Someday maybe.

They already have what you're describing. It's at either Costco or Sams Club, I'm not sure which one. Kroger has a version of this too but they don't let you pay with the app, you have to then go to a self checkout machine to finish the transaction with a pin pad. You don't have to remove your groceries from the basket though. Kroger's implementation isn't that sweet. Why would I want to use a sh*tty barcode scanning app on my phone then have to take all my stuff to a self checkout machine anyways. Might as well use the $1,000+ scanners they have there, they'll do a much better job. Kroger's app is clunky. Costco's is much better. Theft is the impediment to the adoption of these implementations.

RFID would be sweet. They've been talking about this for the better part of 20 years though and nobody will do it because it requires many different people to work together to make it happen. You would need every two bit vendor in the grocery store to use the RFID which would increase costs across the board that nobody wants to shoulder, not to mention all of the additional tech and equipment the store would have to purchase and maintain. There's a lot of bada$$ tech that is possible, but not much of it's financially feasible.

Amazon Go is kickin balls here with these stores. I'd go to a Go store instead of a 7/11 any day of the week.