Amazon Goes Offline With Bricks-And-Mortar Grocery Chain; Envisions Opening 2,000 Stores

Tyler Durden's picture

After launching Amazon Fresh, an online food delivery service, in numerous cities just a few years ago, Amazon has now decided it has to go "offline" to capture incremental share of the grocery market.  As such, the company today revealed its first brick-and-mortar small-format grocery store, Amazon Go, one of at least three formats the online retail giant is exploring as it makes a play for a higher share of grocery spending.  With in-store technology designed to track customers' every step, the Amazon Go concept promises "No Lines" and "No Checkout."

 

The first Amazon Go concept store is roughly the size of a convenience store, though according to the Wall Street Journal the company is also testing a drive-thru concept as well as a traditional 30-to-40,000 square foot grocery store that would combine in-store shopping and curbside pickup. 

The Amazon Go store, at roughly 1,800 square feet in downtown Seattle, resembles a convenience store-format in a video Amazon released Monday. It features artificial intelligence-powered technology that eliminates checkouts, cash registers and lines. Instead, customers scan their phone on a kiosk as they walk in, and Amazon automatically determines what items customers take from the shelves. After leaving the store, Amazon charges their account for the items and sends a receipt.

 

Meanwhile, in the suburban Seattle neighborhood of Ballard, a handful of workers on Monday were finishing up one of Amazon’s two drive-through prototypes in the area, which according to the people close to the situation are slated to open in the next few weeks. The wood-paneled building with green trim and an overhang appeared to have at least three covered bays for cars to pull up and pick up orders, with a paved driveway in front.

 

The third concept, the newly approved multi-format store, combines in-store shopping with curbside pickups, according to the people. It will likely adopt a 30,000- to 40,000-square-foot floor plans and spartan stocking style like European discount grocery chains Aldi or Lidl, offering a limited fresh selection in store and more via touch-screen orders for delivery later. Stores in this format, which are smaller than traditional U.S. grocery stores, could start appearing late next year.

While the store formats are still in the concept stage, Amazon ultimately envisions opening up to 2,000 brick-and-mortar locations.

Amazon envisions opening more than 2,000 brick-and-mortar grocery stores under its name, depending on the success of the new test locations, according to the people. By comparison, Kroger Co. operates about 2,800 locations across 35 states.

 

Adding grocery pickups will be “part of their secret sauce in terms of all of the different ways in which they can engage the customer in bringing the product to them,” says Bill Bishop, chief architect at grocery and retail consultancy Brick Meets Click. “Everyone is looking at grocery because of frequency. Frequency guarantees that you have density.”

Amazon GO

 

Of course, Amazon isn't the first to test drive-thru and curbside grocery as Target and Wal-Mart both plan to launch curbside pickup in 1,000 stores by the end of next year.

Meanwhile, with nearly 40,000 grocery stores in the U.S. employing roughly 3.5mm people, most of whom work at or near minimum wage, Bernie's "Fight for $15" agitators may want to take note of this development.

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kliguy38's picture

I hear they have a self drive car too 

francis_the_wonder_hamster's picture

Any chance somebody in the Trump administration remembers there is such a thing as anti-trust law?

froze25's picture

Not sure, once he's in office you can start an online petition on Whitehouse.gov to bring attention to it. I would sign it.

SMG's picture

Do you get an electric punishment shock if you go in and buy nothing?  Or worse yet a bad review?

remain calm's picture

Podesta will just pick up his 13 year old dessert and it will be charged on the app as pizza. Pedophile Nirvana

Stuck on Zero's picture

Flash mobs are gonna have fuuuun in there.

CheapBastard's picture

Not worth having a B&M store anymore; only attracts thugs. Plus, good luck finding suitable, qualified employees. Given the level of common sense from listening to these campus videos I'd say forget B&M stores and stick to big mail centers.

Archibald Buttle's picture

as a lifelong boycotter of things that piss me off, i propose a general boycott of anything owned by this bezos character. he obviously does not have my, and likely your, best interests in mind when he makes his various bizness decisions. deny him your digital fiat. more importantly, deny him your phyzz fiats. most importantly, deny him your business. all of it.

CCanuck's picture

Anything Amazon is like the plague!
I don't go near it, not even with Hitlary's dick. Not interested in getting fucked by Bezos, or any other big box corporations!
Would support a local venture with the same services.
Why can't smaller local groups offer similar services?

Ccanuck

Archibald Buttle's picture

not even with hitlary's dick

i am soooo stealing that line. ;-)

mkkby's picture

If you like lower food prices, this competition should make you happy.  The krogers and safeways are gobbling up smaller competitors so they can raise prices.  Not good.

I doubt their pickup lanes will work well.  It sounds like a traffic jam in waiting.  I do like the continuous scanning to avoid checkout lines.  However, I don't have a dumb assed *smart* phone, so I wonder how I can shop there.

Jim Sampson's picture

Isn't life weird? Some start in a garage and go online... some start online and go to a garage.

Tijuana Donkey Show's picture

Walmart.com Kroger.com Alibaba.com

There is still enough competition......... for now. 

SilverRhino's picture

Amazon and Wal-Mart head to head.   

 

Wal-Mart is TOAST

in4mayshun's picture

Not so sure about that. What will these stores do about security? Shelf stocking? Spills? It reminds me of an episode on South Park where Cartman bought a theme park for himself and then realized he had to hire 1 person to run the ride, then another to take tix, then another to maintain the rides, and so-on. Before he knew it, he had to employ an army of people and he no longer had a private theme park because he needed to sell tix to pay all his employees.
This will be the eventuality of Amazon stores. They will try to break the mold, but they will just end up another Walmart. In fact, I predict Walmart will benefit more from these experimental stores more than anyone.

francis_the_wonder_hamster's picture

One of my favorite South Park episodes.

The Dem friend of mine who I occasionally mention in posts IS Cartman.

CCanuck's picture

Wal mart lasts as long as welfare is functional.
Cut off ebt, welfare, social assistance and Wally's World changes or dies.

Yes We Can. But Lets Not.'s picture

Walmart will kick Bezos' ass in brick-n-mortar retailing, and IMO will probably eventually kick his ass online as well.

mc225's picture

Wal-Mart's online prices though are way high. YMMV

pitz's picture

Wal-Mart actually makes money though.

CheapBastard's picture

I hope more stores sell online at a reasonable price. It's harder for Barry's thugs to steal my red Jordans and shot me to death when I shop online. Plus, online prices whether it be Amazon or others have pretty reasonable prices so why bother going to the store?

CCanuck's picture

How much of that fiat is taxpayer provided?
This shit can't last forever; you cannot have open borders and a welfare system without collapse. The result is guaranteed!

tmosley's picture

Yes, let's stifle innovation. Because muh feelings.

in4mayshun's picture

At some minimalist point, the reason we have commerce is so humans can have jobs-that is the point unto itself. Money is a byproduct but the paradigm is still based on the fact that people have to have something to do that contributes to society. So if "innovation" is eventually going to put all humans out of work, then YES, it needs to be stifled.

francis_the_wonder_hamster's picture

I'd never suggest sifling innovation.

Do you really think that Amazon, on online book retailer originally, should be able to price out local competition in any industry they feel like?  I also object to GE being involved in financie and insurance.  There are a lot of similar examples.

But, I'll admit, I do have a personal dislike for Amazon.  It stems from their fruadulent $650 million bond offering in 2001.  Amazon was on the ropes financially, bleeding red ink as they lost a dollar on every sale and tried to make up for it on volume.  They were shut out of US capital markets, so they went and shopped the offering in Europe for these convertible bonds.  The problem was, they failed to disclose that many of the "revenues" backing these bonds were actually wortchless stock of many failed dot.com customers.

This cash windfall basically bought Amazon enough time to sell their cheap Chinese fakes, kill a ton of smaller businesses, and actually turn profitable.

I have despised everythign Bezos touched ever since, so maybe I'm a bit senstitive on the subject.

http://www.barrons.com/articles/SB989352238634146215

BeanusCountus's picture

You will get your revenge. Note to investors: he's desperate for MARGINS. He's fucked, and he knows it. Sell AMZN tomorrow if you own it.

ghostfaceinvestah's picture

The only thing that really makes money for Amazon is AWS.  The entire retail operation is breakeven on the best quarters.

mkkby's picture

Amazon is just a stock market get-rich scheme.  Bezos is NOT TRYING to make profit.  They want market share for splashy headlines = billions for the execs and their stock options.

CCanuck's picture

Not sensitive Francis, you're aware.
Anything Amazon or Bezos is a killer to local economies.
I'm willing to pay more for locally produced goods and services.

Boycott and Fuck The Big Box Corps!

Ccanuck

Drachma's picture

tmosley: I don't think this is about innovation as much as it is about a complete control grid and the elimination of anonymity and privacy in every aspect of our lives. It is about the smart grid and the internet of things. It is obvious that the food in these stores will have RF transducers that can communicate with your phone, refridgerator, local electrical utility, etc. Wifi-enabled appliances are a reality. Your smart-meter is designed for implementating a communication link between these appliances and your local utility. This is a reality as much as driverless cars connected to the internet. The infrastructure is in place an being rolled out as we speak. So for those that have so far avoided online purchasing of basic necessities in favour of traditional anonymous, cash-based transactions, this move by Amazon in my opinion is designed to entice a good portion of them that will no doubt be lulled by the carrot of convenience. It seems our lives our geared to be managed by the millisecond, bit by bit. So watch what supposed innovations you cheer for. Just a thought. Cheers.

BuddyEffed's picture

http://www.huffingtonpost.com/entry/bill-de-blasio-trump-tower-security_...

BuddyE predicted these high costs a few weeks ago.

But I was low estimating 100 million over 4 years.

NYPD asking 35 million just to get to inauguration day!

Wonder what secret service bill will run?

Now estimating well north of 1 billion cost over 4 years over DC cost.

ACES FULL's picture

How much did it cost for Obama to spend 3 weeks in Hawaii every Christmas or Bush to go to Crawford so many times? Tell Herr Blasio to go fuck himself, let him raise taxes on the idiots that live in his jurisdiction...again.

Archibald Buttle's picture

cant we just agree to throw any sense of reason and/or accountability out the window already? how else will the math work?

bonderøven-farm ass's picture

Deflationary.

Hedge accordingly......bitchezzz. 

RiverRoad's picture

Send your car out to grocery shop.

BabaLooey's picture

The only thing I have to say is;

Fuck Amazon

Fuck Jeff Bezos

 

ACES FULL's picture

Throw a monkey wrench into anything Bezos does every chance you get...I will.

OT: Recently started drinking a couple beers every evening after discovering the goodness of Yuengling Traditional Lager from a friend. Out of curiosity last night I looked into the company on Wikipedia. Oldest operating brewery in U.S., the current owner endorsed Trump and is facing boycotts. Moral of the story: I'm gonna have to start drinking moar to show my support. Matter of fact, I'm showing that support right now, Yuengling Lager in a bottle is hard to beat. Cheers.

Billy the Poet's picture

Yuengling Traditional Lager

 

That's the stuff. Got some cold ones in the fridge.

ACES FULL's picture

Brewed in your neck of the woods.

Gold Pedant's picture

Wake me up when Bozos opens robotic brothels with fembots that can last more than five minutes on a charge. And no "pay as you go" model. I want 'em like Tesla where you pay one time, visit the super-charger, and get as many uses as you'd like all included in the purchase cost.

shimmy's picture

Congrats on making what'll surely be the best post at ZH all week. 

Tijuana Donkey Show's picture

Yea? We'll need other robots to clean them. Maybe illegal immigrantbots?

in4mayshun's picture

LOL! Douche bags filled with WD40

Duc888's picture

 

 

How much of this shit will be USDA GMO non food?

directaction's picture

None, probably. It'll be worse than WalMart. 
Minimum wage workers, slummy. Cheap food.
Filled with trailer trash and creepy ghetto types.  

ACES FULL's picture

Grow and catch as much of your food as possible, only way to know whats in it.

RiverRoad's picture

Kinda like shoplifting.....only you're sent the bill.