Dive Brief:
- For the first time, Amazon has expanded its Go store concept outside of the United States, according to The Grocer. The cashier-free store will be located in central London.
- It is not yet known how many stores the retail giant plans to open in London, Reuters reported, but it will likely compete against U.K. retailer Marks & Spencer, as well as grocers Tesco and Sainsbury's.
- The retailer may possibly open its U.K. store in London's West End shopper district at Oxford Circus, according to a report in The Telegraph in December.
Dive Insight:
After a successful pilot and expansion in the U.S., Amazon Go is taking on the U.K., but will it be a winner overseas?
Currently there are just 10 Amazon Go stores stateside. Most are clustered in the same city, with four in its original location of Seattle, two in San Francisco and four in Chicago. The limited number of current stores suggest conservative expansion despite its announcement last year that it plans to open more than 3,000 additional spaces by 2021.
For Amazon Go, one of the largest hurdles to growth is customer adoption. When the retailer first launched in the U.S., critics weren’t sure shoppers were ready for a cashier-free experience where cameras and sensors track a customer's every move. According to a survey of 1,000 Americans by Shorr Packaging Corp in July, 84% of people liked the idea of shopping at Amazon Go, but 20% said there were drawbacks. These drawbacks include not being able to use coupons, no social interaction and the inability to pay with cash.
Londoners, however, are already familiar with the idea of checkout-free stores. Two of the U.K.'s most popular supermarkets, Sainsbury and Tesco, tested a cashierless store in London just a few months after Amazon Go opened in Seattle. The Inquirer reported that Sainsbury had fairly decent adoption rates after its pilot, with 100,000 transactions on its "scan, pay and go" technology called SmartShop. The company also said that it was seeing 3,000 to 4,000 new customers registering for the tech each week.
This could bode well for Amazon, whose technology is more developed than both U.K.-based grocers. While all require a mobile device, Amazon's sensors remove the friction of having to scan each product, automatically detecting what has been removed from a shelf and adding it to a customer's virtual cart.
If the retailer's expansion goes well, it could meet or even surpass the expectations that it will be a $4.5 billion business by 2021, according to RBC Capital Markets, since Amazon’s cashier-free stores generate 50% more revenue than traditional convenience stores.
Amazon has been planning its U.K. arrival for well over year. In 2017, the e-commerce giant filed many trademarks with the U.K. Intellectual Property Office for its slogans like “No Lines. No Checkout. No Seriously.” In addition, the retailer is already familiar with its British audience through its Amazon Fresh, Amazon Pantry and Prime Now services in the region.
Considering the retailer also has these three services in other countries like Japan and Germany, what starts with London could signal an international takeover.
