As of Q3, 2018, AmazonGo stores have been perfected enough to start to expand out of home base Seattle into the likes of New York and San Francisco. This is a major advent of automation and convenience for brick-and-mortar shopping.
Amazon is mulling over the idea of rapidly expanding to become one of the leading convenience stores — where the stores require at least 50% less staff as cashiers no longer exist in a “grab-and-go” shopping experience without the need to line up and check out.
The Future of the Retail Store
The stores essentially allow shopping faster than ever thanks to high-tech LiDAR sensors and speedy urban consumer fulfillment. Customers walk in and sign in via a QR code, then simply pick up items they want, and leave the store, using a virtual POS that automatically bills the transaction.
Amazon’s expansion plans not only threaten competitors like Walmart and other major grocery chains but also corner convenience stores such as 7-Eleven, who recently integrated ApplePay, according to LinkedIn. Bloomberg elaborates that it could hurt not just the likes of 7-Eleven but those quick-service sandwich shops such as Subway and Panera Bread, and mom-and-pop pizzerias and taco trucks. There’s no doubt it would hurt local and independent physical retailers, in some ways at least.
It might indeed be that Amazon as a leader in retail convenience could break the boundaries of retail evolution and essentially help eliminate meal-time logjams in busy cities. partly reinventing the brick-and-mortar food and meal customer experience, with AmazonGo, Whole Foods and Amazon Fresh. We know automated food delivery is coming to the extent that a majority of shoppers will order groceries via E-commerce, maybe as soon as the next 5–10 years. Our food experience in the near future will be vastly different than today.
Cashiers Go Extinct in the 2020s and 2030s
The cashierless experience isn’t coming just to convenience stores like AmazonGo, it’s coming to cafes, healthy fast food chains and many other sectors of the urban retail convenience space. From CafeX to Spyce to dozens of Chinese innovations, the 020 future is bright and automation is coming in retail and we know it will be soon. AmazonGo ultimately is just one symptom of that. But if the report is true, 3000 stores is a lot of AmazonGo experiences dotting the biggest cities in North America.
Amazon understands the importance food has to the future of its plans and will be taking on Kroger, CVS, 7-Eleven, Walmart and others more and more as it finally begins to make its direct assault on brick-and-mortar. The retail industry has been waiting and anticipating this event for a good part of the last decade. As Amazon already has an insurmountable dominance in E-commerce, actual physical stores will only help scale its brand, one of the most trusted by consumers worldwide.
It’s no secret Alibaba and company in China have been way more aggressive in entering the physical retail and 020 space. However Amazon needed time to perfect AmazonGo which is likely the global leader in this kind of automation that does enhance the customer experience of shoppers. Amazon’s use of the QR code is interesting since it’s a technology that has essentially made China go cashless decades before this will likely occur in the West.
According to the Verge, Amazon reportedly plans on having 10 stores open by the end of the year, 50 locations in major cities by next year, and then an exponential growth in locations in 2020 and 2021, as long as it doesn’t hit any roadblocks. The 2020s as the decade of automation is just around the corner.
AmazonGo stores are likely to have multiple formats and hybrid formats suitable to different markets and different locations. The key point is the frictionless consumer checkout experience, where Amazon realized early that speed matters to shoppers and consumer fulfillment.
Realistically it would make more sense if Amazon acquired and converted existing stores to AmazonGo, though it’s not clear who would be a good candidate and whether or not it’s practical, but the alternative of doing it in-house is very costly. The company unveiled its first cashierless store near its headquarters in Seattle in 2016 and has since announced two additional sites in Seattle and one in Chicago. Expansion into New York City and San Francisco will take place later this year.
By offering a vast selection and quick, convenient delivery, Amazon has become the world’s largest online retailer. The fastest customer experience will win in physical retail too, since for busy urban consumers, reducing shopping time really is the ultimate convenience. AmazonGo stores certainly represent a disruptive new wave that will hit retail soon in a more mainstream way.