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Amazon Plans Rapid Expansion of Cashierless Stores by 2021

AmazonAMZN is leaving no stone unturned to disrupt the retail sector further on the back of its expanding physical presence.

Reportedly, the e-commerce giant intends to take the number of its cashierless store, Amazon Go to a record of 3,000 stores by 2021. This is in sync with its strategy of aggressive expansion into the retail space.

The company is planning to open 10 Amazon Go stores by the end 2018 and aims at reaching 50 by 2019.

Growing proliferation of artificial technology (AI), machine learning (ML) and internet usage is likely to aid growth of these kinds of stores in this data-driven age.

We believe the company is well poised take advantage of the technical progress in the retail sector with the increasing number of Amazon Go stores and its innovative technologies.

Coming to the price performance, shares of Amazon have returned 64.7% on a year-to-date basis, outperforming the industry 's rally of 29%.

Expanding Amazon Go

Amazon brought the concept of cashierless store in the beginning of this year by setting up its first one in Seattle.

Recently, the company established two more Amazon Go stores that stock ready-to-eat food items like salads, sandwiches, wraps and quick eatables and grocery items along with Amazon meal kits, in Seattle.

Additionally, the company is firing on all cylinders in Seattle's grocery retail market by ramping up its Amazon Go job listings in the city. Currently, there are 190 job posts in Seattle alone.

Further, Amazon introduced its first cashierless store in Chicago few days ago and announced its plans to roll out Amazon Go in New York.

Reportedly, the company is planning to set up more Amazon Go stores in cities like Los Angeles and San Francisco in the near term.

With the cashierless concept, the company strives to enhance the shopping experience of the customers by letting them pay for the items shopped from Amazon Go after reaching home via their smartphones.

All these endeavors are likely to aid the company in rapidly penetrating the grocery and ready- to-eat food retail space. Furthermore, this will strengthen Amazon's physical presence which will help it to address the traditional section of the population which still hesitates to shop online.

Per a report from Statista, revenues in the U.S. food and beverages market are expected to witness a CAGR of 12.5% between 2018 and 2022 and to reach $25.98 billion by 2022. Further, revenues in this particular market are projected at $16.2 billion for 2018.

Amazon.com, Inc. Revenue (TTM)

Amazon.com, Inc. Revenue (TTM) | Amazon.com, Inc. Quote

Gaining Competitive Edge

Amazon, with its checkout-free grocery stores, has revolutionized the brick-and-mortar retailing.

Further, the latest plan of the company is likely to give a tough competition to the small as well as big retailers which are already reeling under its influence. This dominance of Amazon can be attributed to its vast e-commerce platform, expanding online product portfolio and strengthening fast delivery services.

With the rapid expansion of Amazon Go stores, the company will continue to gain competitive advantage against Walmart WMT , Target TGT and Kroger KR who are the major players in the retail space.

Per Reuters, Walmart is in discussions with Microsoft to leverage the tech giant's technology which it is currently working on. This technology is likely to deliver cashierless shopping experience to customers by removing the cashiers and checkout lines from the retail stores.

Nevertheless, Amazon's aggressive retail strategies will help it in reaping benefits from the rapidly growing retail market.

Currently, Amazon carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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