SEATTLE -- Amazon’s expansion into brick-and-mortar sites will begin with a pilot program of 20 grocery stores, 10 of which will be “click-and-collect” drive-up spots for picking up online orders and the other 10 traditional stores complete with shopping carts, according to a Business Insider report.
As reported in a McLane/CSP Daily News Flash, the Seattle-based company aims to open 20 sites in the next two years and believes the U.S. market has room for up to 2,000.
The pilot program will be implemented by the end of 2018 in major cities such as Seattle, Las Vegas, New York, Miami and the Bay Area of California, according to documents viewed by Business Insider. And work is already underway. GeekWire spotted an Amazon grocery store under construction in the Seattle neighborhood of Ballard.
If the pilot is successful, Amazon envisions opening as many as 2,000 stores in the next decade at a rate of 200 stores a year with support from a new generation of distribution centers to replenish inventories, according to Business Insider.
While Business Insider refers to the sites as grocery stores, Bloomberg has described the drive-thru spots as “gas stations,” and The Wall Street Journal has referred to the stores as “convenience stores.” Reports have indicated that these stores would sell produce, milk, meats and other perishable items in-store that customers can take home. Using their mobile phones or touchscreens around the store, customers could also order other goods with longer shelf lives for same-day delivery.
According to Business Insider, the drive-thru spots will be 10,000 square feet, while physical stores could be up to 30,000 square feet. New technologies such as license-plate scanning and in-store kiosks are also being considered, along with a new rapid drive-thru pickup option. Some stores could be a combination of drive-thru and walk-through as Amazon continues to iron out the format, the news source said.
It’s also unclear if the new stores will be open to the public or limited to members of Amazon’s Prime Fresh club, in which members pay a $15 monthly fee to receive grocery deliveries at home. This dilemma is cited in the “risks/concerns” section of the internal documents Business Insider viewed.
Amazon Fresh offers customers free shipping and a selection of more than 14,000 products in categories (many of which encroach on the convenience-store channel’s territory) such as baking supplies, beverages, breakfast foods, coffee, tea, condiments, household supplies and snacks, cookies and candy. The service launched in 2007 and has been slow to expand, rolling out in only 17 U.S. cities and one overseas location in London since.
Amazon CEO Jeff Bezos has previously stressed the go-slow approach for grocery deliveries, saying in a 2013 annual letter to shareholders that “we'll continue our methodical approach—measuring and refining Amazon Fresh—with the goal of bringing this incredible service to more cities over time.”
Amazon’s grocery-store launch won’t be the company’s first in brick-and-mortar. The online retailer has already opened a few physical bookstores and is building out a network of pop-up stores in malls to showcase its line of hardware products.
The e-commerce company has also teamed up with several retailers, installing its Amazon Lockers in shopping centers, convenience stores and other retail channels. Irving, Texas-based 7-Eleven and Beaverton, Ore.-based Plaid Pantries have added the lockers, which enable customers to pick up and return products that they ordered online.