Amazon Pencils Plans for Brick-And-Mortar Presence

SEATTLE — Following the news that Amazon.com Inc. is eyeing the convenience channel, the e-commerce giant is penciling plans for brick-and-mortar grocery stores under the Amazon Fresh banner. 

The online retailer is reportedly looking to open 20 grocery stores over the next two years and believes the U.S. grocery landscape could accommodate up to 2,000 of them over the next decade, according to BusinessInsider.com.

Citing documents, the news outlet said Seattle-based Amazon plans to operate a 20-location pilot program in major metropolitan areas including Seattle, New York, Miami, the Bay Area and Las Vegas by the end of 2018. 

Ten of the stores are planned to be click-and-collect locations for order pickups, while the rest will be traditional locations.

The total number of grocery stores has not been finalized and is subject to change; however, the documents indicate a proposed annual launch schedule of 200 stores, each supported by a new generation of distribution centers. 

Some of the documents say the click-and-collect spots will be 10,000 square feet, while the traditional stores could be as large as 30,000 square feet. Technology such as license plate scanning, in-store kiosks and a rapid drive-thru pick-up option also are being considered, according to the report.

Many industry observers have predicted that Amazon would move into this sector, looking to fresh grocery to fuel its continued rapid growth — the company has tripled in size over the last five years and accounted for 50 percent of all retail growth in 2015. What's noteworthy, however, is the speed at which the e-commerce leader is expanding.

"Amazon has long been known for sacrificing short term profits for long term opportunity," said Sterling Hawkins, operations and venture relations at the Los Angeles-based Center for Advancing Retail & Technology. "They've been studying grocery for years and with this additional focus, their ability to learn and willingness to invest could make them a national grocery player in a relatively short amount of time."