Not only are Amazon’s new cashierless and cashless stores giving traditional “convenience” stores a run for their money, new research suggests they’re already more lucrative.
Based on in-person tests and data-collection, analysts at RBC Capital found that each Amazon Go store will reel in an estimated $1.5m in yearly revenue, 50% more than your typical corner shop.
The e-commerce behemoth opened its first Go store in Seattle at the beginning of 2018, and has added 8 more locations since — with construction on a 9th location in New York City reportedly underway.
But 8½ Go locations are barely the beginning.
Amazon is considering a plan to open as many as 3k new Go stores over the next 2 years, which, based on RBC’s report, would mean that the storefronts could become a $4.5B business by 2021.
While it may be more profitable long-term, the upfront investment for cashierless stores is much larger than “dark age” convenience outlets.
The first Go location cost more than $1m in hardware alone, which, according to Morgan Stanley, means the e-commerce giant would need to shell out close to $3B for 3k stores.
Of course, if anyone has the tickle to do it, it’s Amazon.