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Disruptors 2019: Amazon Go

Russell Redman

January 22, 2019

3 Min Read
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Photos: Amazon

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This is part of Supermarket News’ 2019 Disruptors package. See the entire lineup here.

In 2018, Amazon extended its challenge to brick-and-mortar grocery retailers beyond online delivery to format.

The launch of the cashierless Amazon Go stores takes shopper convenience to a new level and could reshape the in-store experience, industry analysts say. Though Amazon Go isn’t deemed a direct competitor to supermarkets, reports that Amazon plans up to 3,000 of the stores by 2021 have mass retailers worried they could see a siphoning of their food and beverage dollars, as consumers opt for no-waiting-in-line transactions for snacks, meals or grocery purchases.

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“Amazon Go’s combination of ready-to-eat and ready-to-cook food choices challenges both grocers and restaurants,” Steve Bishop, co-founder and managing partner at Brick Meets Click, commented following a visit to an Amazon Go store in Chicago. “With no lines or waiting, it’s easy to see why people would stop by twice a day — first to grab lunch and later to pick up a dinner option on their way home.”

Amazon Go stores use overhead cameras, weight sensors and deep learning technology to detect merchandise that shoppers take from or return to shelves and to keep track of the items selected in a virtual cart. Shoppers use the Amazon Go mobile app to gain entry to the store through a turnstile. When customers leave the store, the “Just Walk Out” technology automatically debits their Amazon account for the items they take and sends a receipt to the app.

“Amazon has designed a store that maximizes customer throughput and sales to produce exceptional results. In fact, Amazon Go stores produce more sales per square foot than virtually any other retailer except Apple and a few other specialty stores,” Brick Meets Click observed after studying sales volume and inventory turns at the first Amazon Go in Seattle, which opened to the public in January.

“The exceptionally high performance of both of these retail productivity metrics makes it clear that Amazon has succeeded in disrupting the established self-service model by developing a model that makes much more efficient use of inventory and the retail footprint,” the strategic advisory firm noted.

Other retailers are watch closing and testing similar concepts. “We’re experimenting with Amazon Go-like technology where, for example, somebody could come in and pick up a Plated [meal kit] order, it would know that you’re in the store, it would tender an order and you can leave outside of the checkstands,” Albertsons Cos. executive Shane Sampson told analysts this past spring.

In Dallas, Walmart has developed a smaller Sam’s Club format to pilot technologies — namely, mobile-first payment — that promote a more interactive shopping experience.

Currently, there are seven Amazon Go locations: three in Seattle, three in Chicago and one in San Francisco. At press time, three others were planned for San Francisco, Chicago and New York City. The stores range from 1,200 to 2,300 square feet. Bloomberg reported in September that Amazon Go may grow to as many as 50 locations in key metro markets during 2019. And in December, a Wall Street Journal report said Amazon is testing cashierless checkout in larger store spaces.

“I think it’s ready to go,” Loop Capital’s Andrew Wolf said at the 2018 SN Financial Analysts Roundtable, before reports about a large-scale expansion of Amazon Go. “I have a sense this could be a real big change in retail.”

About the Author

Russell Redman

Senior Editor
Supermarket News

Russell Redman has served as senior editor at Supermarket News since April 2018, his second tour with the publication. In his current role, he handles daily news coverage for the SN website and contributes news and features for the print magazine, as well as participates in special projects, podcasts and webinars and attends industry events. Russ joined SN from Racher Press Inc.’s Chain Drug Review and Mass Market Retailers magazines, where he served as desk/online editor for more than nine years, covering the food/drug/mass retail sector. 

Russell Redman’s more than 30 years of experience in journalism span a range of editorial manager, editor, reporter/writer and digital roles at a variety of publications and websites covering a breadth of industries, including retailing, pharmacy/health care, IT, digital home, financial technology, financial services, real estate/commercial property, pro audio/video and film. He started his career in 1989 as a local news reporter and editor, covering community news and politics in Long Island, N.Y. His background also includes an earlier stint at Supermarket News as center store editor and then financial editor in the mid-1990s. Russ holds a B.A. in journalism (minor in political science) from Hofstra University, where he also earned a certificate in digital/social media marketing in November 2016.

Russell Redman’s experience:

Supermarket News - Informa
Senior Editor 
April 2018 - present

Chain Drug Review/Mass Market Retailers - Racher Press
Desk/Online Editor 
Sept. 2008 - March 2018

CRN magazine - CMP Media
Managing Editor
May 2000 - June 2007

Bank Systems & Technology - Miller Freeman
Executive Editor/Managing Editor
Dec. 1996 - May 2000

Supermarket News - Fairchild Publications
Financial Editor/Associate Editor
April 1995 - Dec. 1996 

Shopping Centers Today Magazine - ICSC 
Desk Editor/Assistant Editor
Dec. 1992 - April 1995

Testa Communications
Assistant Editor/Contributing Editor (Music & Sound Retailer, Post, Producer, Sound & Communications and DJ Times magazines)
Jan. 1991 - Dec. 1992 

American Banker/Bond Buyer
Copy Editor
Oct. 1990 - Jan. 1991 

This Week newspaper - Chanry Communications
Reporter/Editor
May 1989 - July 1990

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