Market Overview

A Glimpse Of Amazon's First Full-Size Grocery Store With No Checkout Cash

A Glimpse Of Amazon's First Full-Size Grocery Store With No Checkout Cash, Inc.'s (NASDAQ: AMZN) vision of creating the future of grocery stores with no checkout lanes became a reality Tuesday.

What To Know

Amazon's quest to build a grocery store with no checkout lane dates back five years; on Tuesday, its first full-size grocery store opened in the Capitol Hill neighborhood of Seattle. The company has been testing its cashierless technology in smaller convenience stores but its new concept called Amazon Go Grocery stands in at more than 10,000 square feet, according to CNBC.

While this is smaller than a typical grocery store, it's more akin to a "neighborhood market." The store includes around 5,000 items, including produce, dairy, seafood, meats, bakery goods, household goods, and a beer and wine selection.

See Also: How Amazon's One-Day Shipping Is Raising The Bar To Compete In E-Commerce

Shoppers will walk into the store, scan a QR code they obtain from inside the Amazon mobile app. The process of shopping is the same as it always has been: walk around the aisles and place items to the grocery cart. But the checkout process consists of simply walking out of the store with zero human interaction.

"I think what we're trying to do here — and with all of our physical stores — is really work backwards from the customer, and deliver some differentiation," Amazon VP of physical retail Cameron Janes told CNBC.

Why It's Important

Forrester Research analyst Brendan Witcher told CNBC the grocery segment is characterized by low margins and represents a challenge for any company to scale. But at the same time, there is "nowhere we shop more" than a grocery store.

"That is [Amazon's] strategy," the analyst told CNBC. "It doesn't need to be a profit generator."

The new Amazon Go Grocery brand isn't considered a competitor to its other grocery chain, Whole Foods. In fact, Janes acknowledged it isn't trying to be Whole Foods or replace them.


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