Amazon Wants To Launch Brick-And-Mortar Grocery Stores

Amazon wants to get more into the grocery business and is reportedly gearing up to launch convenience stores and curbside pickup locations.

According to The Wall Street Journal, which cited people familiar with the matter, Amazon wants to build brick-and-mortar stores that will sell perishable items, including milk, produce and meats. Potentially using a mobile device or touchscreens located inside the store, customers can also order goods with longer shelf lives to get them delivered to their home on the same day. Amazon will also roll out drive-in locations, where customers’ online grocery orders will be delivered to their car. Amazon is reportedly working on developing technology that can read license plates to speed curbside delivery up. The stores will be aimed at people who shop for produce or groceries on their way home from work. Amazon plans to compete directly with grocery stores and Walmart, noted the report.

Currently, the grocery stores, which are known inside Amazon as Project Como, will be exclusively for customers that subscribe to its Fresh service, which gives them same-day food delivery at predetermined times. Amazon got rid of its $299 annual fee for Fresh and instead is charging $15 a month for Prime members.

WSJ noted that grocery sales could be a big deal to the growth plans for Amazon since consumers typically shop for food once a week, and by offering a service, Amazon can also try to sell more profitable items along with produce or milk. Groceries currently represent around a fifth of consumer spending, but online grocery sales only represent about 2 percent of all grocery sales in the U.S. Morgan Stanley Research estimates the online grocery market may double to over $42 billion in 2016. If Amazon enters the grocery market, it would represent the latest area of shopping that Amazon wants to upend after killing it in the clothing market, forcing traditional retailers to rethink their strategies.