retail news in context, analysis with attitude

Bloomberg has a story quoting Morgan Stanley analysts as predicting that Amazon’s plan to build 3,000 checkout-free Amazon Go stores by 2021 - reported by the media, though not confirmed by the company - could cost Amazon as much as $3 billion.

“We see Amazon as having to invest between $0.5 billion and $3 billion in building these 3,000 stores,” the analysts said this week. “Given Amazon’s need to invest in in-store automation technologies, cameras and sensors, we would not be surprised to see the cost toward the higher end of this range.”

However, considering that Amazon’s 2018 retail operating expenses came to $200 billion, the analysts said that this still would represent a “small investment.”
KC's View:
It seems to me that one of the things that all these analysts have to do is suspend their preconceptions about what these stores are going to be and how much they’re going to cost.

For example, I’m not sure that they’ll all be freestanding stores. It is entirely possible that some of them could be attached to Whole Foods or 365 by Whole Foods stores, maybe even as retrofits where and when it makes sense. I wouldn’t even bet against the possibility that some of these stores might not be convenience stores with a food focus, but rather could apply Amazon Go technology to other categories.

I guess what I’m saying is this. Don’t assume that Amazon is going to work in a straight, traditional line as it expands on its bricks-and-mortar ambitions. It is a better bet that there will be some surprises, detours, digressions and unexpected innovations along the way.