Amazon Could Open 3,000 C-stores

Ambitious expansion of cashierless Amazon Go stores in the next few years seen as potential threat to QSRs and fast casual restaurants.

September 20, 2018

On the heels of unveiling its first Amazon Go store in Chicago this week, Amazon.com Inc. is now considering scaling up with as many as 3,000 new cashierless Amazon Go stores, Bloomberg reports.

The first three Amazon Go stores—two in Seattle and one in Chicago—feature “Just Walk Out” technology, including overhead cameras that track shoppers’ movements and the Amazon Go app. The stores provide ready-to-eat breakfast, lunch, dinner and snack foods, as well as Amazon’s Meal Kits. Earlier this year, the Seattle Times reported that Amazon Go is headed for San Francisco next.

Adding 3,000 stores to its brand would make Amazon one of the largest c-store chains in the United States. Such an aggressive expansion would be expensive just from a construction standpoint, and stores’ operation costs—including the required cameras and monitoring equipment—would be high as well. A Bloomberg source familiar with the first Seattle Amazon Go store suggested that costs could be contained by limiting the stores’ product focus and emphasizing the convenience of the brick-and-mortar stores.

Last week Amazon CEO Jeff Bezos said Amazon was “very interested” in physical stores that offer something new to the consumer. “If we offer a me-too product, it’s not going to work,” he said.

Dense urban areas with affluent millennials—already home to many quick-service chains—are Amazon’s primary target for the new stores. With a city expansion strategy, Amazon Go could encroach on fast-casual restaurants too, according to NACS vice president of strategic industry initiatives, Jeff Lenard. The most important retail factors for consumers are location and avoiding checkout lines, Lenard said.

“Amazon Go already has no lines,” Lenard said. “The key to success will be convenient locations. If it’s a quarter mile from where people are walking and biking, the novelty of the technology won’t matter. It’s too far away.”

Amazon Go customers tend to come back frequently, according to data collected by the retailer. For more about Amazon Go, read Frank Beard’s NACS Daily article on “3 Takeaways from a Visit to Amazon Go.”

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