According to a report in the New York Post, the e-commerce behemoth has “contemplated” a two-story physical retail offering manned with robots on the top floor picking out items for shoppers. The company may have a prototype store ready by late 2017. The ground floor of such a store would be stocked with items that shoppers typically like to touch, such as fresh produce and alcohol.
Based on the Post’s report, it would seem that Amazon’s proposed store is a cross between a typical grocery store and a fast-food outlet because it includes a drive-thru window where customers can pick up their groceries after ordering them online. This concept is similar to rival Wal-Mart Stores Inc.’s (WMT) curb side pickup service. In the future, the stores could also include pharmacies. According to the Post, the average size of such stores would range anywhere between 10,000 feet to 40,000 feet. As with Amazon Go, the store would only be open to members of the company’s Prime program.
There is a business rationale for Amazon’s enthusiasm for robots. The Seattle company, which already uses robots extensively for its fulfillment operations, could significantly cut down on employee costs through their use. The Post’s reports quotes an anonymous source as saying that the company is aiming for an average of six employees per location. That is a significantly low number for a store the size that Amazon is planning. (See also: 10 Facts That You Didn't Know About Amazon).
That number also includes a manager, who would be responsible for signing new members to the company’s grocery delivery service - Amazon Fresh. While another worker would restock shelves, a pair would be responsible for manning the drive-thru windows. Two workers would help robots fill out grocery bags and pass them onto conveyor belts for delivery to customers below.
Amazon’s ambitions in physical retail have garnered much news in recent times. The Seattle company unveiled Amazon Go, a grocery store without checkout lines and cashiers last December. In addition, analysts have surmised that its recent announcement regarding hiring of 100,000 workers in the next two years as indication that it will open more physical retail stores in the future. The company’s reinvention of the traditional retail experience will boost membership numbers for its Prime program. Amazon reported results that fell below analyst expectations last week. While sales were up, its operating margins were down and ended up in an earnings miss for the company. (See also: Amazon Tumbles On After-Hours Revenue Miss).