(vehicles clinking)
- Amazon's new stores are giving us a glimpse
of how the company wants to change retail.
And it's not what you might expect.
By combining the ease of online shopping
with shopping in person, Amazon is trying
to reshape how we buy everything in the future.
In the last 25 years, Amazon has grown from an
unknown online book seller to one of the most valuable
and powerful corporations in modern history.
Amazon did this by totally rethinking how to sell
products in the age of the internet.
By putting convenience and good deals above all else,
Amazon has created a platform that can get you
almost anything in two days or less.
But the company wants more.
Amazon wants to sell you everything.
CEO Jeff Bezos's singular mission has been
to create the everything store.
But before you can do that, Amazon has
to become the do everything company.
So what could possibly be next for Amazon?
Well, to truly become the everything store,
Amazon has to do something counter intuitive.
It has to move into the real world.
That's because a vast majority of the purchases
we make everyday, we make offline and in person.
In most of the country outside the big cities,
people shop way more at big buck stores
like Walmart than websites like Amazon.
Out of the $800 billion spent on groceries each year,
just 2% of it is spent online.
As for the whole retail industry,
well that's five trillion dollars in the last year
and e-commerce is just under 10% of it.
Think about those huge numbers
and it starts to make a whole lot of sense
why Amazon is getting into offline retail.
When it spend 13 billion dollars
to buy Whole Foods last year,
the was the moment everyone realized Amazon
was taking offline retail seriously.
- Amazon is going to buy Whole Foods.
- First it was books then it was household products.
- Why would Amazon buy a brick and mortar grocery store?
Analyst say Amazon could revolutionize
the supermarket experience.
- But Whole Foods isn't Amazon's only physical store.
It's also experimenting with what
it would be like if shopping in real life
were as easy as it were online.
And that's where Amazon Go comes in.
So we're here at the Amazon Go store in San Francisco.
It just opened and we're inside.
We just scan our app to get in
and now we're gonna take a walk around
and see what they have to offer.
Amazon Go is the company's experimental
cashier-less convenient store.
These Go stores typical sell prepared food,
some groceries, and basic items you'd find
at say like a Walgreens or a 7-Eleven.
So the big draw of the Amazon Go store is that
you can come here for breakfast, lunch, and dinner.
They have an off-site kitchen
and they make a whole bunch of fresh food every single day
and they package it and they bring it here
and it's ready to eat as soon as you buy it.
They've also partnered with a lot of
third-party retailers and chains to bring their food
into the stores so you can buy here as well.
So one of the unique things I saw here
at the store are these ready to cook meal kits.
You buy one of these boxes for a flat fee here.
It's 16$ for the falafel patties.
It's 19$ for the burger.
And you get all the ingredients you need
to make a meal for two in about 30 minutes.
It's all about convenience.
Meal kits make shopping easier because you don't need
to search the store looking for a list of ingredients.
And cooking is faster because well
everything is portioned out for you.
The one thing we haven't talked
about here is the technology.
Amazon does this by basically placing a whole bunch
of cameras, sensors, all throughout the store.
And they track you as you move through it.
They track you as you grab stuff off the shelf.
They know when you've taken something off the shelf,
they put it in your shopping cart.
And even know when you put something back.
And then they take it out of your shopping cart.
They do all these through some smart software.
There's a lot of computer vision stuff going on.
A little bit of artificial intelligence.
But effectively, you as a customer
don't need to worry about anything.
You just walk to the store, you grab what you need,
and put your stuff in your bag,
and you walk out, and you're done.
And that's it, we just got all these food.
And seem like we didn't pay for it but we actually did.
At the end, you get a receipt
and it shows up in the mobile app
and the receipt even tells you
how long you spent in the store.
So you're probably wondering why Amazon wants to sell you
lunch or random grocery items like bread and milk.
It's not that there's a ton of money
to be made unless you can do it at scale.
And scale is what Amazon is great at.
If Amazon can put a Go store in every city in America,
just think of how much more toothpaste
and toilet paper it could sell.
This isn't so much about replacing
your local market or deli.
It's actually a super smart way to compete with Walmart.
90% of Americans have a Walmart
within 10 miles where they live.
140 million people shop at Walmart every single week. That adds up to
roughly half a billion (correction: trillion) in annual sales.
And what does Walmart sell more than anything else?
Groceries.
That's the market that Amazon hasn't fully been able to tap.
Because it's not a thing people tend to buy online.
Amazon knows that and it knows that it needs
to expand if it wants to truly sell us everything.
Amazon has to become Walmart before Walmart becomes Amazon.
In Amazon's ideal world, you're buying every single thing,
not including rent or utilities from Amazon.
You're shopping with a Prime credit card.
You're watching movies in TV on Amazon Video.
You're getting your groceries delivered from AmazonFresh.
You're buying your essentials from PrimePantry.
Eating out at Amazon Go.
Eating in with Amazon Restaurants.
And cooking with ingredients from Whole Foods.
You're gonna furnish your entire apartment with Amazon.com.
Hell, you can even get your oil change
or your gutters cleaned by ordering
a specialist through Amazon home services.
And naturally that had some people
concerned and rightfully so.
The Go store already automates cashier jobs.
And the company is hard at work
at putting more robots in its warehouses.
And don't forget that Amazon is working on
drone delivery which would radically change
how it ships all of its products.
It's easy to look at all these forward thinking projects
and think that one day, Amazon could take over the world.
But the reality is that it's still
small in the overall retail market.
It only does about a third of the
annual sales that Walmart does
and there's plenty of competing chains
like Walgreens and Target.
They're definitely not going out of business any time soon.
Well the Amazon Go store maybe the most
sophisticated store in America right now.
Is it really the most convenient?
I think so but it certainly won't be unique forever.
Other businesses are bound to adopt this tech-forward model.
Even Walmart right now is testing
something like scanning and go that let's you
do something similar with your smartphone.
Now Amazon is testing their high tech retail in cities
where their Prime Now services has warmed people up
to the idea of buying food from Amazon which is smart.
I've been to the Go store a few times already.
And can totally see myself going back
for a breakfast burrito kind of all of the time.
If Amazon can find success in selling
groceries and food offline,
they have that chance at selling us everything.
Today, Amazon owns e-commerce.
That's just a fraction of the larger retail market.
Having actual stores that you can go to
and grab a few things is the key to its growth
and making more money because its convenient.
And convenience is what builds Amazon's empire.
It's still the driving force behind
everything the company does today.
Amazon has to figure out the convenient way
to sell you not what you might need in two days
but what you need right now.
So what's the weirdest thing you've ever bought on Amazon?
For me, I buy all of my picture frames there
which is really not all that weird.
And it could probably get a whole lot weirder.
So let us know in the comments
and if you haven't already, subscribe to us on Youtube.