Amazon Wants To Become The World’s Largest Grocery Chain

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December 6, 2016 11:46am NASDAQ:AMZN

NASDAQ:AMZN | News, Ratings, and Charts

Amazon.com, Inc. (NASDAQ:AMZN) has plans to open over 2,000 grocery stores, according to a Wall Street Journal report.


Yesterday, the Seattle-based company announced the first of its brick and mortar locations, dubbed Amazon Go. The futuristic store allows shoppers to simply take what they like and leave, skipping the checkout process entirely. Using a combination of advanced imaging, machine learning, and other technical processes, the store automatically scans the items a shopper leaves with and bills them accordingly.

Apparently, Amazon Go is only the beginning of the company’s plans. It has a couple more store concepts in the works as well, according to the WSJ:

Two of the other store formats Amazon is considering are bigger than the convenience-style Go store, according to people familiar with the matter. In November, Amazon’s technology team approved a proposal to open large, multifunction stores with curbside pickup capability, clearing the way to start hiring and planning, according to one of the people.

Two drive-through prototype locations, which don’t offer an in-store shopping option, are also slated to open within the next few weeks in Seattle, the people said.

The Verge has some more color on just how big Amazon’s plans might be:

This is all part of Amazon’s grand plan to become the logistics backbone of retail, both online and offline. More brick-and-mortar locations make it easier for the company to conduct grocery delivery through its Amazon Fresh brand. And as more customers begin turning to Amazon for groceries and everyday supplies, the lower Amazon can bring its prices as it scales upward and purchases inventory in larger amounts. The deeper these layers intertwine, the more likely a consumer is to subscribe to Amazon Prime, which will surely begin incorporating offline benefits to complement its free shipping and video freebies.

Clearly, the company is intent on continuing to reinvent the retail model at every level imaginable. These new physical locations will allow it the reach to deliver not just groceries, but many other goods as well, with same-day delivery times that no competitor will be able to match.

Amazon shares rose $6.69 (+0.88%) to $766.05 in Tuesday morning trading. Year-to-date, AMZN has gained 13.43%.

AMZN-2016-12-06


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