The Post’s report indicates Amazon is considering a “two-story, automated grocery store in which a staff of robots on the floor upstairs grabs and bags items for shoppers below.” This setup would mostly hide robots from view, and assumedly obscure the fact that humans are doing very little of the actual work.
Although the company has denied plans for a supermarket chain in the past, several insiders have leaked information to the contrary. Amazon reportedly sees the industry as ripe for disruption — and traditional grocery stores’ huge reliance on human labor is likely at the crux of its plans:
Labor accounts for the lion’s share of a supermarket’s operating costs. In 2015, the industry employed 3.4 million workers nationwide, with an average grocery store employing 89 workers to generate annual sales of more than $2 million, according to the trade group.
If it can figure out a way to leverage technology and cut most of those labor costs out of the equation, Amazon could really be onto something. The company is reportedly considering a massive version of its prototype Amazon Go convenience store — perhaps as large as 40,000 square feet — and “would be devoted to goods that shoppers typically like to touch, sources briefed on the plans told The Post.”
The biggest problem with grocery stores so thinly staffed would be shoplifting, although Amazon reportedly believes that people who can afford a Prime membership would be less likely to steal. Still, the company could employ a couple of “greeters” at the entrances of the stores to help minimize the risks there.
Could Amazon do to the supermarket industry what it did to brick-and-mortar retail? Only time will tell, but signs are mounting that the company’s grand vision will come into focus soon.
Amazon.com, Inc. (NASDAQ:AMZN) fell $2.20 (-0.27%) in premarket trading Monday. Year-to-date, AMZN has gained 7.74%, versus a 2.35% rise in the benchmark S&P 500 index during the same period.