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Amazon ramps up its retail challenge

News, 07 December 2016
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SEATTLE: Project Como, Amazon's strategic plan to capture more of the US groceries market, took another step forward this week when the e-commerce giant unveiled a new type of store that effectively eliminates the need for a checkout.

Called Amazon Go, the first of the new small format grocery stores is being tested in downtown Seattle before opening to the public early next year if the trials prove successful.

Installed digital technology, including sensors and artificial intelligence, will allow shoppers simply to take what items they want and then leave the store, knowing they will be billed automatically after they exit.

The radical concept is just one of at least three prototypes that is undergoing trials, the Wall Street Journal reported, citing people familiar with the matter.

Another plan – which has been given the go-ahead by Amazon's IT team, according to the Journal's sources – involves large stores with kerbside facilities that would enable shoppers to place orders digitally and then pick them up later.

At up to 40,000 square foot, these warehouse-style stores are reported to be modelled on the no-nonsense format favoured by successful European discounters, such as Aldi, Lidl and IKEA.

Finally, Amazon is expected to open the first of its new drive-through stores in Seattle within the next few weeks. Shoppers would just have to place an order, for example via an app, and then pick up their goods without leaving their car.

Amazon's push into convenience shopping reflects a retail trend that has been growing in recent years, but the company also stands to gain by cutting down on its logistical and transport costs.

If trials of the three formats go well, it is reported that Amazon plans to open more than 2,000 grocery and convenience stores across the US.

Commenting on the development to Reuters, retail analyst Jan Dawson said: "It's a great recognition that their e-commerce model doesn’t work for every product. If there were hundreds of these stores across the country, it would be a huge threat."

Data sourced from Wall Street Journal, Reuters; additional content by Warc staff

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