Amazon Could Disrupt Convenience Stores With Plan For Up To 3,000 Cashierless Stores
So the news of Amazon being set to open as many as 3,000 cashierless stores has some worried despite the idea that the move will revolutionize retail. The trend has been growing to replace workers with robots, from fast-food burger chains to coffee shops.
New AmazonGo convenience stores are set to open by 2021, according to a report from Bloomberg.
“That would be Amazon’s most aggressive move in the brick-and-mortar space since its purchase of Whole Foods in 2016,” The Verge reported. “It would also significantly alter the company’s potential offline retail success as it moves to compete with grocery stores brands like Kroger, convenience and liquor stores like CVS and 7-Eleven, and big-box retailers like Walmart and Target.”
Amazon, which has faced backlash over “brutal” working conditions for employees, tested the waters with the concept in 2016 in Seattle when it opened its first cashier-less store. The company has since announced two more locations in Seattle and one in Chicago.
“CEO Jeff Bezos sees eliminating mealtime logjams in busy cities as the best way for Amazon to reinvent the brick-and-mortar shopping experience, where most spending still occurs,” Bloomberg reported. “But he’s still experimenting with the best format: a convenience store that sells fresh prepared foods as well as a limited grocery selection similar to 7-Eleven franchises, or a place to simply pick up a quick bite to eat for people in a rush, similar to the U.K.-based chain Pret a Manger.”
Here’s how the cashierless stores will work: Shoppers will use a smartphone app to enter the store. Once they scan their phones at a turnstile, they can pick from a range of salads, sandwiches, drinks and snacks—and then walk out without stopping at a cash register. Sensors and computer-vision technology detect what shoppers take and bill them automatically, eliminating checkout lines, AdAge reported.
The addition of these planned 3,000 stores would make AmazonGo one of the biggest chains in U.S.
The U.S. currently has 155,000 convenience stores, including 122,500 that are combined with gas stations, according to industry group NACS. Non-fuel purchases at convenience stores totaled $233 billion in 2016, with cigarettes and other tobacco products the best-selling items, AdAge reported.
The AmazonGo announcement affected other retailers on Wall Street.
“Stocks for big-box retailers like Walmart and Target began sliding following the news, as it’s now clear Amazon could, in a few short years, begin seriously eating into the traditional grocery, restaurant, and household goods markets. Amazon is already threatening those types of businesses with its push into grocery delivery, same-day delivery of household goods, and the strengthening ties between Whole Foods’ nationwide network of stores and its Prime subscription service. And if Go becomes a dominant force in major metropolitan centers in the U.S., it could make Amazon a threat to every CVS, 7-Eleven, and fast casual dining establishment in the country,” The Verge reported.