Dive Brief:
- Amazon is building a new Go store in Seattle that’s 70% larger than the original location and situated just a mile away, according to GeekWire. The store will open this fall.
- A GeekWire reader noticed Go signage behind a window covering at the Madison Centre office building on 5th Avenue. The site found Amazon had received a permit for a 3,000 square foot store at that location, and the company confirmed that it would indeed be opening a Go store there in the coming months.
- Amazon plans to build checkout-free Go stores in Chicago and San Francisco, as well. According to Recode, the company will build six locations in addition to its original Seattle store, which opened earlier this year.
Dive Insight:
The new Amazon Go store is nearly twice the size of its original location — but that isn’t saying much, considering the walk-in-walk-out space is just 3,000 square feet.
That’s a far cry from the average supermarket size, which was 42,800 square feet in 2015. It is more in line with a convenience store, which averages 2,500 square feet. The new store should allow Amazon to test new items and a layout that’s more similar to a typical urban food outlet. It should also mean shorter waiting lines to get in — something the original location sees every day.
Amazon has tamped down any talk of a wider rollout for Amazon Go or its underlying technology. At the Shoptalk conference earlier this year, project leads Gianna Puerini and Dilip Kumar said the company is not planning to bring the checkout-free experience to Whole Foods stores. And despite speculation that Go locations could eventually canvass the country, Amazon hasn't confirmed anything beyond its Seattle, San Francisco and Chicago locations.
Go’s technology is very expensive and food retail has very slim margins, making a broad expansion tough to justify, even for deep-pocketed Amazon. It seems more likely that the e-tailer will continue slowly building outlets in major cities and use them mostly as promotional vehicles for the company.
Still, if just-walk-out technology keeps gaining momentum, it’s hard to imagine Amazon wouldn’t accelerate its rollout, or perhaps license the technology to other retailers. According to a recent survey of 1,000 consumers by Shorr Packaging Corp., 75% said they would shop at an Amazon Go store if one were nearby.
In the months since the company opened its first Seattle location, news has emerged that other tech firms are working on similar technology. This includes Microsoft, which is reportedly in talks with Walmart, and startup AiFi, which has built a scalable system for retailers and will soon roll out in a 50,000-square-foot grocery location.
What remains to be seen is whether checkout-free stores perform significantly better than the more economical scan-and-go technology that’s spreading across retail outlets. Kroger, Dollar General, Meijer and numerous other grocers are all rolling out mobile checkout platforms and say they’re seeing promising results so far. Walmart recently canceled its Scan & Go rollout, but the retailer is clearly still interested in helping shoppers skip the checkout line, as its recently unveiled Check Out With Me service, which allows shoppers to pay handheld device-carrying associates, shows.
Research has shown checkout to be one of consumers’ main pain points. Retailers are rushing to solve that problem, but at the same time they shouldn’t neglect the human touch that shoppers also value. A recent survey from tech firm Interactions revealed that 60% of shoppers want someone to greet them. Meanwhile, the Shorr survey found that 20% of consumers say they would lose out on something important by shopping at Amazon Go over a traditional retailer.
