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Amazon Will Consider Opening Up to 3000 Cashierless Stores by 2021
September 20, 2018 11:04·
Shoppers examine ready meals at the first Amazon Go in Seattle Washington in January. After more than a year on trials Amazon opened the cashier-less store to the public
Amazon is considering opening as many as 3,000 locations of its cashierless stores across the U.S. by 2021, according to a new report from Bloomberg. Amazon also routinely loses money expanding internationally. Whole Foods, for instance, started selling Amazon Echo smart speakers nearly immediately after the $13.4 billion acquisition of the grocery chain closed in August 2017. Amazon has committed to opening stores in NY and San Francisco.
Deeper into the store, shoppers can find a small selection of grocery items, including meats and meal kits. It would also change Amazon's business, putting more focus on its physical stores.
Spencer Soper of Bloomberg first reported the news that will likely disrupt the industry of quick food stores like 7-Eleven, Subway, and Panera Bread. If Amazon's plans pan out, it could eventually become one of the largest chains in the US. Kroger fell 1.5 percent, and Target declined 0.6 percent. While opening brick-and-mortar stores seems counter-intuitive to Amazon's e-tailer DNA, we shouldn't forget that companies such as Walmart are still raking in the profits and, in that case, are valued at three times as much as Amazon. However, with less staff and strictly dedicated to foodstuffs, which have a higher profitability than other retail goods, Amazon hopes to recoup the investment faster than your bog-standard food store.
"We have no plans to open 2,000 of anything", a spokesperson said a few days after the newspaper's story published.
Customers just require the AmazonGo app to enter the store, then just grab items such as in-store ready-made foods off shelves and then leave.
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One person familiar with Amazon Go's development said in an interview with The Seattle Times that the number of stores the company is aiming for has been a subject of debate internally. A plan under discussion after the first store opened to employees for testing called for a few hundred locations, the person said, centered in dense urban areas where ample foot traffic would generate enough sales volume to offset the expensive technology that makes the cashierless store run.
The report of new Amazon Go stores follows the opening of two new Amazon Go locations, in Seattle and Chicago, earlier this month. The store offers consumers a cashier-free shopping experience and tracks purchases through video cameras and sensors in store shelves.
"It is still a very pricey technology to put in place, compared to a 7-Eleven", the source said.
Amazon's ramp up could accelerate quickly.
The internet giant is considering plans to have about 10 locations open by the end of this year, about 50 locations in major metro areas in 2019, and then as many as 3,000 by 2021, said the people, who requested anonymity discussing internal plans.
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