Tuesday, October 18, 2016

Amazon planning to sell groceries at its own convenience stores

A Wall Street Journal story last week outlined Amazon's plans to expand its grocery business with new, bricks-and-mortar convenience stores. According to the story, Amazon envisions having stores that would sell milk, produce, meats and other perishable items that customers could take home. And using mobile phones, customers could order products like cereal and peanut butter for same-day delivery.

In addition, Amazon will reportedly open drive-in locations where online grocery orders will be brought to customers' vehicles. License-plate reading technology - currently under development - could speed customer wait times.

The stores are initially slated for subscribers to Amazon's Fresh service, which promises same-day food delivery at set times.

Although online grocery purchases only account for two percent of U.S. grocery sales, Morgan Stanley Research estimates that online sales could more than double this year. And Amazon may consider grocery sales as crucial to their growth, since consumers typically restock their refrigerators on a weekly basis, and grocery purchases could lead to other, more profitable purchases.

Amazon expects stiff competition for curbside pickup from Walmart, which plans to have the service at about one fourth of its 4,600 U.S. stores by the end of 2017. Walmart recently purchased e-commerce company Jet.com for $3.3 billion.

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