Stores

Amazon is testing all of the stores

The e-comm giant is introducing its Just Walk Out tech to suburbia (hi Mom).
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Francis Scialabba

· 3 min read

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Go big and go (closer to) home. That seems to be Amazon’s gameplan for its new Go store.

The e-comm giant is introducing its Just Walk Out tech to suburbia (hi Mom), with the first location slated for Mill Creek, Washington, outside of Amazon’s Seattle headquarters.

  • At 6,150 square feet, it’s more than double the size of the largest existing Go stores, most of which range from 1,200–2,700 square feet.

Convenience is king and scan-and-go tech is “the way of the future,” noted Richard Kestenbaum, co-founder and partner at Triangle Capital. And Amazon, in signature Amazon style (more on that later), is getting out ahead.

“Once your competitor across the street has it, you have to have it. Knowing full well that convenience is so critical to consumers, there’s no reason to stand in line anymore in most retail stores,” Kestenbaum told us.

Hold on: Plenty of people still need convincing.

  • Only 17% of shoppers say they regularly use cashierless tech, as opposed to 29% who have either never heard of it, or have but aren’t all that interested, per a December eMarketer survey.

“It’s like the shiny penny that a lot of people in the industry are interested in, but I’m not sure that consumers are quite there yet,” said Suzy Davidkhanian, principal analyst at Insider Intelligence. That’s why Amazon is going suburban.

“They need to see if this is really going to be the thing that they’re going to do. They need to see that it works in every market.”

On the flip side: Davidkhanian says she is much more bullish on the Amazon Style concept announced last week. The lessons learned there could be more valuable to the company, she noted, given that most people still shop for clothes IRL.

  • An estimated 62% of US apparel and accessories sales will be done offline this year, according to eMarketer.

“It’s apparel, accessories, beauty…[and] footwear. Those four categories together are very large volume, but they’re also everyday items,” Davidkhanian said. “A lot of them are just fun [and] cool, which is what Amazon is not known for.”

Try and try again: Kestenbaum, meanwhile, has some reservations—given that Amazon has rolled out plenty of brick-and-mortar concepts (like Amazon Books, Amazon Fresh, and Amazon 4-Star) to mixed reviews.

“We’ve seen over and over again how Amazon has not been able to conquer the world of physical retail the way that it has in online retail,” Kestenbaum said.

But hey, he doesn’t knock them for trying. “No one knows what the future of retail is. It’s still evolving, and we don’t know particularly how to combine…exploration and discovery in physical stores with technology.”

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