After the launch of its first store in Seattle back in 2016, expansion has been slow for Amazon Go. Now, two years later, things seem to be ramping up, but I’m still not 100% convinced by the project. Yet, 2019 could be the year I change my mind.
Since the initial launch in Seattle, Amazon has managed to get a Go store open in both San Francisco and Chicago. There are a total of just seven stores to date, though. Not exactly what you would rapid growth.
One of the main reasons for this sluggish expansion could be costs. It is reported that the hardware alone for the original downtown Seattle store costs more than $1 million. The complexity of the way the store works - where customers can walk in pick up what they want (whilst being monitored on camera) and then walk out, only to be billed by Amazon later - is probably why we’ve not seen more of these stores launched. But that could all be about to change…
Amazon seems ready to accelerate growth
Over the past couple of weeks, stories have been breaking about new Amazon Go stores, planned expansions and target figures. We know that an Amazon Go store is coming to New York, after job listings for positions such a ‘store manager’ went live online, and word on the street is that Amazon is looking at London too. If the retail giant can find a spot between 3,000 and 5,000 square feet near London’s Oxford Circus, we could see the first Amazon Go store to launch outside of the US next year.
The numbers that Amazon gives when asked about its expansion plans are quite interesting. Ten Amazon Go stores by the end of 2018 (time is running out on that one), 50 stores by the end of next year, and a whopping 3,000 locations open by 2021. If Jeff Bezos and his gang are going to meet those targets, they need to pick up the pace considerably.
More interestingly than the numbers, perhaps, is the recent news that Amazon Go could be coming to airports. Leaked emails revealed that the company is reaching out to airports, including Los Angeles International, to set up meetings and open a dialogue about the possibility of opening Amazon Go locations.
It seems like a strange move. I totally get the folks in downtown Seattle, San Francisco and New York understanding the concept, buying into the idea, but at an airport? For me, it feels like a recipe for disaster. What are they going to do with the millions of passengers wandering through the concourse who have no idea what Amazon Go is, wondering why they can’t get in the store?
How is Amazon going to manage accounts across multiple countries? If I fly to Los Angeles International, can I get into the store with an Amazon Go app that is linked to a UK account? As someone who has lived in three different countries in the last six years, let me tell you that Amazon does not make it easy to move Prime between nations or to download books from the Kindle Store in different languages, for example. These are kinks that would need to be ironed out for the airport expansion to work, but they are not deal-breakers.
When Amazon acquired Whole Foods Market in 2017 for $13.7 billion, the deal could be considered as a statement of intent for its brick and mortar business plans. Next year could be the year that we finally see Amazon put its foot down on the accelerator. With big expansion and ambitious airport talks, the next two or three could be crucial for the retail industry.
What do you think about Amazon Go’s expansion? Are we about to see it take off? Let us know in the comments.