Amazon’s plan to open 3,000 new cashier-less Amazon Go stores in the next few years could seriously disrupt the convenience sector.
The good news for Aussie convenience retailers is that it plans to open these stores in the US. The not-so-good news is that it could launch Amazon Go on these shores too.
Growing its Australian presence
Amazon clearly has big plans for Australia. The retail titan recently opened a large distribution centre (DC) in Sydney’s south west. It’s roughly twice the size of Amazon’s DC in Melbourne.
As for convenience, Amazon Go stores would be a direct rival to established Australian retailers. As well as selling ready-made meals and snacks, Amazon’s new stores would also sell some grocery items.
If they follow the US model, they’d be small-format stores that don’t require customers to have cash or even cards. In fact, the only things shoppers would need are their phones.
Amazon’s stores use ground-breaking technology and AI to make the shopping and buying process highly automated.
First, shoppers gain access to the stores with their mobile phones. Second, once they’re inside, cameras and sensors inside the store record items they pick up. Third, when shoppers leave the store with their goods, Amazon automatically charges their accounts.
Will Caltex Australia lead the fightback?
Caltex Australia is improving the convenience retail offering at its petrol stations. It’s also teamed up with Woolworths Group in an attempt to achieve the growth that has so far eluded it.
It’s already dealing with the disruption that electric vehicles are bringing. Some believe they could end up threatening its fuel processing and retailing business.
What kind of threat Amazon Go would present to Caltex and other petrol and convenience retailers is still unclear.
One thing going against Amazon is that its new stores are extremely expensive to set up. According to Bloomberg, every new store costs $US1 million ($1.4 million) in hardware alone.
Nevertheless, as a trillion-dollar company, Amazon has famously deep pockets. What’s more, it isn’t afraid to lose money for an extended period to build a business.
The battle for Australian convenience could be just beginning.
