Shoppers spend less at Amazon Go than other convenience stores

Dive Brief:

After examining customers' purchases in Chicago, Seattle, San Francisco and New York, a 2019 Earnest Research report emailed to Retail Dive found that households are shopping at Amazon Go stores at least 2 to 5 times per quarter. In comparison, customers usually shop at retailers like CVS, Walgreens and Rite Aid at a similar pace (3 to 4 times quarterly), the report found.
Amazon Go shoppers spend on average between $7 and $15 per shopping trip, the report found. However, baskets were higher at the other aforementioned retailers, where shoppers spent between $20 and $25 on average, per the analysis.
Shoppers continue to spend more at larger grocery stores than at Amazon Go. The analysis indicated that consumers visit grocers like Kroger and Publix about 10 times per quarter and spend $40 to $50 on average.

Dive Insight:

This analysis comes just after Amazon announced its plans to open more Amazon Go stores in Chicago and Seattle. Though the company's physical store operations are relatively new, it appears to be in line with the shopping patterns of other established brick-and-mortar retailers, but consumers aren't spending as much there as they are in similar stores.

After the company was criticized for not accepting cash, it opened its first store that takes cash in New York in May. The move towards accepting cash could work in Amazon's favor two-fold. On one hand, offering cash payment could win over underbanked or unbanked customers, and on the other, the move could safeguard Amazon from critics and regulators seeking to ban cashless retailers for discriminatory practices.

While the online retailer attempts to penetrate the brick-and-mortar retail market, competitors are raising capital to open similar smart stores. The company hasn't confirmed Bloomberg's report indicating that it plans to open 3,000 stores, but an RBC Capital research report estimates that the retailer could rake in between $1.1 million and $1.95 million per Amazon Go location.

However, Standard Cognition, a cashier-less checkout product developer, raised $5.5 million last summer, and an additional $35 million in Series B funding this summer, according to a press release emailed to Retail Dive. Zippin, a San Francisco-based startup, also announced plans to open a cashier-less convenience store last summer, and automated checkout company Grabango raised $12 million in January for technology that would let customers check out via smartphone app.