Published on: February 25, 2020
Amazon today is opening its first full grocery store, Amazon Go Grocery, in Seattle, on Pike Street in the Capital Hill neighborhood.
Customers with the Amazon Go app, which can be downloaded to their mobile devices, simply scan the app when entering, bag their groceries as they walk the store, and then leave without scanning anything or going through any sort of checkout lanes. Products are then charged to their linked credit card accounts.
The 7,700-square-foot store has about 5,000 SKUs, much more that the Amazon Go convenience stores, or, as Amazon describes it, "everything you’d want from a neighborhood grocery store—from fresh produce and meat and seafood to bakery items and household essentials—plus easy-to-make dinner options. We offer a mix of organic and conventional items from well-known brands, along with special finds and local favorites."
“Amazon Go was really focused on serving customers breakfast, lunch and snacks in urban central-business-district areas,” Cameron Janes, an Amazon vice president who runs the company’s expanding fleet of physical stores, tells the Seattle Times. Amazon Go Grocery, by contrast, will have “everything you’d expect to find in a neighborhood market.”
The Times goes on: "Aside from improved convenience, shoppers may see few other differences between Amazon Go Grocery and other upscale urban grocery stores — and that’s no accident, Janes said. Everything about the Go Grocery store, including its layout, inventory and especially its sensing technologies, is engineered expressly so that 'customers don’t have to change the way they shop'.
"Although Amazon has used checkout-free technology since 2016, making it available for such a wide range of products was a challenge. Customers handle items such as tomatoes or apples differently than they do packaged goods, Janes said, and typically pick up several before selecting the ones they want."
Dilip Kumar, vice president of Amazon Go, tells the Wall Street Journal that there is no upwards limit to how big a store could be served by Go-style technology, now that they've cracked the code for this store. “We’ve learned a lot,” he says. “There’s no real upper bound. It could be five times as big. It could be 10 times as big.”
There currently are 25 Amazon Go convenience stores, ranging between 450 square feet to 2,300 square feet. The operate in Seattle, New York, San Francisco and Chicago.
The Journal also adds another twist to Amazon's Go technology plans:
"Amazon hopes the grocery store will serve as a showcase for its technology as it seeks to sell its system to other businesses. The company has recently been in talks with potential partners and is targeting retail options including convenience stores and shops in airports and sports arenas, according to people familiar with the matter. Amazon has discussed multiple revenue models, including a fixed licensing fee or a revenue-sharing agreement, one of the people said.
"Mr. Kumar declined to comment on how many Go Grocery stores are planned or plans for licensing.
"The Go licensing plans are Amazon’s latest effort to partner with some of the same traditional retailers it has long disrupted, and who regard the e-commerce giant as a fierce competitor and threat. In recent years, Amazon has also signed deals with Rite Aid Corp. and Kohl’s Corp. to handle delivery pickups or returns that help drive foot traffic to their stores."
- KC's View:
- There will be a lot of questions asked about whether this is an economically feasible store, but folks who spend a lot of time on this issue are wasting their time.
First, this is an investment. Calculators used to cost hundreds of dollars, and now they are built into our phones. Especially if the goal is to license the technology to other retailers, the costs will come down.
The point is that Amazon continues to challenge conventional wisdom, and to push the ball forward. My experience with Amazon Go stores always has been a good one - it is easy, fast, and accurate. I can't wait to try this new store.
It may be that over time, checkout lanes will go the way of toll booths. I know that from the first time I visited a Go store, I was convinced that this technology will be as important to retailing as scanning. I see no reason to change my mind.