You may assume that Amazon controls the retail world. After all, they do make up about half of all e-commerce sales. While it seems everyone is shopping online these days, 90 percent of sales are still made offline at brick and mortar stores.
Amazon Go Cashierless Stores
Looking to get a piece of those sales, Amazon is planning to open around 3,000 physical stores in the next three years. Of course, these aren’t going to be your boring old stores. The company plans to have their Amazon Go stores almost completely automated. They want to make your shopping experience is as quick and easy as possible. No registers, no lines to wait on and you won’t even have to take out your wallet. Just get in and get out.
You’ll just scan your app, walk in, grab whatever you want and then just walk out. A combination of overhead cameras, weight sensors, and deep learning technology will keep track of which items you’ve selected. Your Amazon account will then be charged appropriately after you leave the store.
Amazon to Use Online Data For Offline Stores
As of now, the stores are mainly focused on groceries and small items you might find at a convenience store. If you’re looking to grab something quick for lunch, they’ll also be offering things like sandwiches and salads.
To decide how each store is stocked, the company will use data based on online sales. If the majority of people in a certain town are purchasing say a specific type of cereal or soda online, then those items will be stocked in that area’s physical Amazon Go store. This gives Amazon a huge advantage over other grocery stores as nobody else on the planet has access to that type of data.
Convenience Over Size
Amazon is not looking to compete with big box stores like Walmart and Target just yet. Their initial physical stores are going to be pretty small with most being under 2000 square feet. In comparison, Walmart’s smaller Express stores average 15,000 square feet while their SuperCenters average a whopping 105,000 square feet.
Amazon’s strategy is convenience over size and to get people comfortable with the technology. If these initial Amazon Go stores are successful, you can expect larger stores stocked with more items to be on the way. The major issue facing Amazon is that opening the tech-heavy stores is quite expensive. The original AmazonGo in downtown Seattle required more than $1 million in hardware alone. Amazon hopes the stores can make enough of a profit to offset costs.
As of now, there are four Amazon Go stores in operation with three in Seattle and another in Chicago. They plan to have 10 Amazon Go locations open by the end of 2018 and 50 stores in places like San Francisco and New York City by 2019.