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Amazon Ups Retail Game With Cashierless Supermarket Plans

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Amazon (AMZN - Free Report) is making every effort to disrupt the retail sector further on the back of its advanced cashierless technology.

The e-commerce giant is reportedly opening Amazon Go supermarkets next year, which is in sync with its strategy to strengthen presence further in the retail space.

Notably, the company is testing its Go technology in a 10,400-square-foot retail space located in Seattle’s Capitol Hill area. Stress-testing of the camera arrays are also ongoing.

Amazon is striving to service supermarket stores as large as 30,000 square feet with its cashierless technology.

We believe growing proliferation of AI, ML and Internet are likely to drive the company’s cashierless concept.

Amazon with its cashierless supermarket is likely to revolutionize the retail industry. Furthermore, the latest move will strengthen Amazon’s physical presence.

Intensifying Competition

With the supermarket move, the company is likely to gain a competitive edge against retailers like Walmart (WMT - Free Report) , Target (TGT - Free Report) and Kroger (KR - Free Report) , among others, which are also leaving no stone unturned to fortify presence in the retail industry by adopting Amazon like strategies.

All the three retailers have joined forces with Microsoft to take on Amazon's cashierless concept. Kroger will leverage Microsoft Azure that serves as the most preferred cloud platform for Retail as a Service (RaaS). Consequently, competition in the retail industry is heating up.

Aggressive Expansion Strategy

Nevertheless, Amazon’s rapidly expanding Amazon Go stores are likely to continue strengthening its competitive position in the retail market.

Apart from the supermarket initiative, the company is planning to roll out pop-up kiosks. In fact, Amazon Go teams have already started working on it. Notably, these kiosks are miniature versions of Amazon Go, which can be setup faster compared to setting up a full-fledged Amazon Go store. This in turn will aid Amazon in strengthening presence in malls and sport stadiums.
 
We believe all these endeavors bode well for the company’s Amazon Go initiative.

Amazon introduced the concept of cashierless store in the beginning of 2018 by setting up its first one in Seattle. Currently, Amazon Go stores can be found across 21 locations in the United States – six in Chicago, five stores in Seattle, four in San Francisco and six in New York.

Further, the company is gearing up to open one such store in Chicago and two in New York soon.

Additionally, the e-commerce giant intends to take the number of its cashierless store to a record of 3,000 stores by 2021.

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. Moreover, the company is rapidly penetrating the grocery and ready- to-eat food retail space on the back of its advanced technologies.

Currently, Amazon carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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