The Real Deal Chicago

Amazon Go’s cashier-free store expansion could cost mega-bucks

The firm's nationwide store expansion may come with a $3B price tag
September 20, 2018 03:00PM

Amazon CEO Jeff Bezos and an Amazon Go store (Credit: Getty Images)

Amazon’s plans to roll out 3,000 of its cashier-free stores in the next three years could come with a $3 billion price tag.

The Seattle-based e-commerce behemoth this week opened its first Amazon Go shop outside of its hometown, and wants rapidly to dramatically expand its brick-and-mortar retail footprint nationwide. The first store excluding Seattle opened this week in Chicago, and it already has plans for locations in New York and San Francisco,

Morgan Stanley analysts told Bloomberg the Amazon Go expansion could require an investment of $500 million to $3 billion, but the technology needed to operate the “just walk out” shopping experience could push the cost to the high end of that range.

Customers scan an app on their phone when they arrive at an Amazon Go store. The location is filled with cameras and sensors that track shoppers, identify the products they select then charge their accounts without requiring immediate payment.

The first Amazon Go in Seattle required $1 million in hardware alone, but even a nationwide rollout and the technology it would require would still reflect a tiny fraction of Amazon’s $200 billion retail operating expenses this year.

But it would make the e-commerce giant one of the biggest players in a grocery industry where competitors are already “scared shitless” — according to one supply chain consultant — of how the company’s acquisition of Whole Foods will affect their bottom lines. [Bloomberg] — John O’Brien