On March 1st, the Wall St. Journal published a story about Amazon’s next retail concept.
The stores, estimated to be between 40-60,000 square feet would, in our opinion mirror a mini Target or Walmart selling a combination of groceries and other household goods including clothing, health & beauty items and of course electronics. The reason for that speculation is the lease specifications make the store requirements flexible and not limited to groceries. I 'think' it will be a smaller version of those with an assortment of foods and goods for the mainstream.
What's interesting to me is that they are going into shopping centers - they'll be able to get great rents. The draw for food where we shop more often than for any other things will bring traffic into those stores and use as a hook to sell all the other Amazon products. I also see them building these stores with a lot of technology (not cashierless) - things like the mirrors in the clothing/beauty areas that allow you to try on clothes or put on makeup with just a touch of a button. Remember that Millennials and Gen Z like Brick & Mortar stores that offer an experience - that's what I think these stores will be built around.
At the recent Fancy Food Show in San Francisco, a new research report from Mintel found that these two generations demand a different level of consumer experience when shopping brick & mortar and value experiential buying. Who better than Amazon to create the next generation of retail?
They have announced 400+ new Whole Food stores and 4-5,000 Amazon Go stores - so clearly what they want is to 'own' grocery. Also Philadelphia, NJ and Rhode Island have banned cashierless stores so they will need something in these areas that for the mainstream.
Frankly I think it’s a smart idea.