Amazon Reportedly Mulling Massive Expansion Of Cashierless Stores
Amazon's meteoric rise to the top of the economic food chain has been defined by its willingness to take big, expensive moves in the direction it believes society is going.
The retail market has long been dreading the time when Amazon applies that philosophy to brick-and-mortar locations, and that time may be close at hand. Founder and CEO Jeff Bezos is mulling the expansion of the cashierless Amazon Go concept by as many as 3,000 stores in the next three years, Bloomberg reports.
The tentative plan for expansion would be reaching 10 Amazon Go stores by the end of this year, 50 by the end of 2019 and 3,000 by the end of 2021, which would give it a number of locations competitive with many national convenience store chains.
Plans have not been finalized because Amazon is still trying to figure out the best model for Amazon Go, which has already opened one location in its home city of Seattle, with plans for two more there and one in Chicago. The original store has a combination of prepared foods and a small selection of groceries, while two of the three future locations will have only the prepared foods, according to Bloomberg.
While including groceries in a store would appeal to a broader base of customers than grab-and-go food, it also is more expensive to implement, with some estimates saying that the scanning technology required in place of cashiers cost $1M alone in the first Amazon Go. But as Bloomberg pointed out, Bezos has been willing to sink millions of dollars in the short term when he is confident that the long-term results will be positive.
Whatever form it takes, Amazon Go will almost certainly be an urban-focused store, with multiple locations that could be clustered closely together in each city to make stocking from a central prep kitchen easier. Fast-casual restaurants have been among the fastest-growing type of retail in cities for years now, but Bezos has publicly stated his unwillingness to enter the brick-and-mortar space as a copycat.
It seems that investors are anticipating Amazon Go to have a meaningful grocery component, as stocks for grocery stores have declined with the news of its possible expansion. The Kroger Co., one of the largest grocery companies in the country, saw its stock dip by 3% in a day, Bloomberg reports. Many stores have reportedly been working on their own versions of automated checkout.