Business is booming at first Amazon Go stores

Initial reports about the Amazon Go store concept have been positive, and sales appear strong. In fact, advisory firm Brick Meets Click estimated that sales per square foot at the Seattle store are about $2,700. That's nearly $5 million in annual sales for an 1,800 square foot, cashierless store.

According to Brick Meets Click, "Amazon Go stores produce more sales per square foot than virtually any other retailer except Apple and a few other specialty stores."

The company also estimates that the inventory turns over around 50 times per year, which is four-to-five times more than at other retail operations.

Furthermore, digital marketing firm inMarket believes Amazon Go stores are more of a threat to fast-casual restaurants and convenience stores than to supermarkets. Peak visitation hours at Amazon Go stores in Seattle and Chicago over the past 60 days have been on weekdays during lunch and breakfast.

"Amazon Go's combination of ready-to-eat and ready-to-cook food choices challenges both grocers and restaurants," reported Brick Meets Click Co-Founder and Managing Partner Steve Bishop. "With no lines or waiting, it's easy to see why people would stop by twice a day - first to grab lunch and later to pick up a dinner portion on their way home."

There are six Amazon Go stores open, all with the company's "Just Walk Out" technology, and more locations are planned. In fact, Bloomberg reported in September that Amazon is mulling plans to open up to 3,000 Amazon Go stores by 2021.

Big gains seen in online grocery shopping

According to a Supermarket News story published yesterday, industry experts say that both consumers and retailers are becoming more comfortable with online grocery ordering. As a result, online grocery sales could be poised for significant gains in 2017.

Brick Meets Click CEO Bill Bishop cited his company's research indicating that active online grocery users nearly doubled from 11% of households in 2013, to 21% of households in 2015. Furthermore, he expects that usage may have doubled again since then.

According to Bishop, growth factors include the increasing availability of the offerings, new features available to consumers from more online providers, lower prices fueled by increased competition, and a customer base that's learning how to more efficiently use the services offered.

Robin Michel, a veteran of the grocery industry, said that retailers are "plowing ahead" in pursuit of online grocery despite their reservations about its profitability. On the other hand, independent and midsized operators have been slow to enter the fray, as they worry about the costs involved, the return on investment, and the impact it may have on their store operations.