Amazon cashierless convenience stores could be worth billions, firm says

By AmazonFOXBusiness

Amazon's sales event for digital content

Amazon FireTV Spokesperson Kim Cowser on the e-commerce giant's deals for its Digital Day and the competition in the smart home space.

Amazon convenience stores with cashierless technology are still in their testing phase, but the experimental business could develop into a multibillion-dollar asset to the e-commerce giant within the next few years, according to one equity research firm.

Continue Reading Below

Based on in-person tests and data collection conducted by its analysts, RBC Capital Markets estimated that each Amazon Go store draws about 550 customers per day, with an average transaction size of $10 per trip. With stores open an estimated 279 days per year, the firm estimates that each Amazon Go location can earn roughly $1.5 million per year.

“Amazon Go stores could be a game changer for physical retail experience,” RBC Capitals analysts said in a research note. “Its in-store technology enables shoppers to have a very efficient and pleasant shopping experience. While not a significant financial contributor yet, we believe the overall opportunity is huge.”

If Bloomberg’s report that Amazon is considering the rollout of up to 3,000 cashierless stores by 2021 holds true, the stores could eventually bring in roughly $4.5 billion annually. RBC notes that it could take Amazon several years to break even given the cost of installing the cashierless technology, which amounts to about $1 million per location.

More on this:

Recode was first to report on RBC Capital Markets’ estimates.

Amazon Go store locations use cameras and sensors to detect which items customers remove from shelves. Customers are automatically charged for the cost of the items when they exit the location.

Amazon has opened test locations in Seattle, San Francisco and Chicago as part of a broader push to expand into the physical retail sector.

CORRECTION: A previous version of this article had categorized each store making $1.5 million per day. The figure has been corrected to say $1.5 million per year.

What do you think?

Click the button below to comment on this article.