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Is there a Future for Amazon Shops?
Amazon has grown into the world’s largest online retailer since being founded by Jeff Bezos in 1994. Business is booming, with the American entrepreneur currently being named as the world's richest man, boasting an estimated net worth of $142 billion.
Initially, he launched the company as an online book retailer, leaving his secure job at a Wall Street investment management firm to conduct his new business on a second-hand computer in his garage. Today, Amazon has captured around one-third of the United States' e-commerce sales market.
Employing more than 600,000 people across the globe, Amazon also owns Zappos, LOVEFiLM, IMDB and Woot. It has its own movie and television studio, Amazon Studios, owns Amazon Publishing, and produces consumer electronic products, such as Kindle e-readers, Echo devices, Fire tablets and Fire televisions.
© Paul Christian Gordon / Alamy Stock Photo
Now, having established world domination of the e-commerce market, Amazon is branching out in a bid to expand its portfolio with the Amazon Fresh and Amazon Restaurants divisions.
The company is aiming to capture the grocery and meal delivery market with its new Prime Pantry strategy, persuading people to buy food, snacks and household supplies online. Its "Dash" buttons enable customers to enjoy simple one-click ordering of products.
As well as Amazon's online presence, business analysts said the company needed to have a physical presence on the high street too, in order to carry on growing. Bezos now has a new goal - launching a chain of cashier-less "Go" convenience stores across the world.
The first Amazon convenience store opened in San Francisco in October 2018, with customers urged to "grab and go", with their purchases being automatically charged to their Amazon account.
Consumers log into their Amazon account on their mobile device before entering the store and their purchases are electronically recorded as they put them in their shopping basket, even with their phone in their pocket. As they leave, their bill is deducted from the card associated with their Amazon account. The experience is intended to streamline and speed up the shopping experience for busy consumers, with no queuing up at checkouts.
There are currently six Go stores in the United States, with more planned for New York and Chicago later this year.
First UK store
In the UK, the nation's first Amazon Go convenience store is to open in London later this year. According to a report in the trade magazine, The Grocer, Amazon has already secured retail space in central London for its latest venture.
The United Kingdom will become the location of Amazon’s first convenience shop outside the US. Bloomberg claims that Amazon may be planning to launch 3,000 Go stores by 2021.
The shops sell prepared food, drinks and snacks, focusing on Amazon’s own new line of salads, sandwiches and meal kits. They also sell fresh fruit and vegetables, bread, milk, cheese, chocolates and snacks from Whole Foods.
The main innovation is the fact that there are no cashiers and the traditional checkout process has become a thing of the past.
Amazon uses modern technology, including cameras and sensors, to track shoppers' movements after scanning their account on entering. The system uses computer vision and artificial intelligence tech to monitor people's movements as they choose items off the shelves.
The San Francisco store has the interior of an upmarket convenience store, with microwaves and seating at the front, should customers wish to warm up pre-made food and dine inside.
The store's slogan is “Good Food Fast” and Amazon tech chiefs say that even if the store is crowded, how long it may take to complete the checkout is no longer a problem. Amazon aims to eliminate the morning and lunchtime rush. The American stores are open from 7am until 9pm.
Even though the checkouts have been removed, the shops still have staff to meet and greet customers as they arrive and to check their age in the drinks section.
Are there any teething problems?
Although everything seems to be going to plan so far with the US stores, retail analysts have been quick to jump on the potential shortfalls of the new shopping system.
Although Amazon Go means customers don't have to wait in queues at the checkout, the age-old retail challenges, such as making sure the shelves are restocked, particularly during the lunchtime rush, won't disappear. Critics claim that although the checkout issue is resolved, there are other complications with cashier-free stores.
Customers who wish to buy more than just a handful of items will still need a bagging area, or boxes, in order to carry their purchases. Amazon Go stores currently don't have the convenience of home deliveries, so consumers may prefer to queue at a standard store, rather than carrying shopping home on the Tube, or through the streets.
Critics also say that for mums and dads with toddlers, it will still be just as difficult to navigate through the store, with the children possibly picking things up and adding to the bill, without the parents realising.
However, to date, the American stores haven't hit any hitches and it all appears to be going to plan. The first UK store is expected to open in autumn 2019.
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