Why Amazon Go May Be More of a Threat to Convenience Stores than Traditional Grocery

After a number of technical delays, Amazon Go finally pulled back the curtain on its much-touted cashier-less store at the end of January. Now a month in, consumers and members of the media alike are singing praises, calling the store “flawless,” “not beta” and “absolutely fascinating.” And that positive energy may help fuel an early expansion.

While some may look at the store concept as a novelty, Amazon rarely opens anything to the public unless it knows it has a home run, Christopher Walton, an independent consultant and former vice president of Target Store of the Future, wrote in an op-ed for Retail Dive.

“If Amazon begins to open more Amazon Go stores within the year, it likely portends that Amazon does not care how expensive these stores are and that it will stop at nothing to flood the market with them – competitor grocery and drug stores be damned!” he wrote.

Amazon also has the luxury of taking a profit loss in order to get the concept off the ground — something nearly no other retailer can afford. But other retailers are tackling the same problem in different ways. Walmart, Sam’s Club and Kroger have all recently made a big push for “scan and go” technology that uses mobile apps to reduce or eliminate the time spent in lines.

Kroger’s Scan Bag Go stores represent a tech-based convenience play that may surprise many observers who expected such advancements to come out of Amazon or Walmart. Walmart’s subsidiary Code Eight, for example, is reportedly developing a technology-heavy store that uses computer vision and cashier-free checkout, led by Mike Hanrahan, Jet co-founder and former chief technology officer. Walmart’s more fully developed Scan & Go checkout is now in place at about a dozen stores in several states.

Chris Rockwell, CEO of Lextant, told Retail Dive in an email that the Amazon Go concept is a “powerful response to the value of time.”

“Other grocery entities have also launched curb side/pre-ordering like offers like Kroger’s ClickList or Walmart’s Grocery home delivery service,” he said. “These are a meaningful offer for a type of shopper, but (of course) the extreme couponer and essential browser will have other needs that Amazon will have to meet through its Whole Foods subsidiary where experience can be created, instead of expedited. The Amazon Go store may be more of a threat to every convenience store than traditional grocery.”

For the full article, visit Retail Dive Magazine.