Amazon Go Threatens Wal-Mart, Target, Kroger, Costco Wholesale

What kind of person is most likely to shop at Amazon’s (AMZN) new cashierless, cashless convenience-store concept, Amazon Go? The same kind of shopper who already makes frequent pit stops at BJ’s Wholesale, Trader Joe’s and Wal-Mart (WMT)-owned Sam’s Club, according to research and consulting firm Magid.

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“These three stores should be looking at what Amazon is doing as the overall concept provides the greatest opportunity, or threat, to their business,” said analysts in a release.

The first Amazon Go, located in Seattle, flung open its doors Monday, finally inviting everyday shoppers to peruse aisles powered by computer vision and deep-learning algorithms, and walk out the door without having to line up at a cash register. (The app automatically charges your Amazon account for whatever you take.) The store had, before that, only been open to employees as part of a beta rollout.

IBD’S TAKE: Amazon isn’t the only major retailer furiously developing tech-forward grocery concepts. As Investor’s Business Daily previously reported, Wal-Mart recently trademarked “Wam! by Walmart,” a concept that relates to “retail and online grocery store services featuring home delivery service.”

Target (TGT), Kroger (KR) and Costco Wholesale (COST) should also be concerned, said Magid, since more than half of Target and Kroger customers, as well as 44% of Costco shoppers, said they would consider shopping at an Amazon Go-style store.

Traditional grocery stores are also at risk of losing shoppers to Amazon’s concept, said the firm.

Amazon hasn’t indicated what its plans are for scaling up the concept, but it wouldn’t be a stretch to imagine the e-commerce behemoth trying to incorporate the technology into its Whole Foods Market locations, or Whole Foods’ millennial-focused “365 by Whole Foods” stores.

After acquiring the upscale grocer for $13.7 billion last year, Amazon quickly began offering its smart-speaker devices at Whole Foods, and says it is working on integrating Amazon Prime into Whole Foods’ point-of-sale system, intending for the online retailer’s membership service to act as the grocery store’s customer rewards program.

Magid says Amazon Go’s largest potential market consists of millennials and households with kids, with more than three in five of either category likely to shop there.

“The implication is clear for retailers that desire to appeal to the growing millennials subset, which is becoming more and more comfortable with an online, on-demand world: Amazon will play large in the mindset of these customers and it is imperative that they catch up,” said the firm.

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