Amazon has announced that they’re closing eight Amazon Go stores located in Seattle, San Francisco and New York City. Amazon operates 29 Amazon Go stores – they will soon only operate 21.
Amazon stated that closing the stores is a normal part of business, and that they “will continue to learn which locations and features resonate most with consumers as we keep evolving our Amazon Go stores.”
The brutal truth is this – Amazon Go hasn’t resonated with consumers. The stores are incredibly expensive to build and operate yet the technology has failed to increase sales.
7-Eleven, Casey’s and Yesway are leading convenience store retailers. Neither one has technology like Amazon Go yet they continue to retain and attract new customers. Why? Because they understand what their customers want and they provide it to them – snacks, pizza, gasoline, groceries, value, a fun customer experience, and convenience.
The team that created the technology and designed Amazon Go stores convinced themselves that what customers want is a friction-free shopping experience hence the creation of Just Walk Out technology. It appears they were wrong.
It was a mistake to build a brand, Amazon Go, around JWO technology. Technology isn’t enough to succeed in retail. Convenience retailing is about pleasing customers and exceeding expectations through food, fuel, and assortment. Amazon Go stores became fixated on technology and it remains at the forefront of everything related to Amazon Go. What’s at the forefront of Casey’s? Their damn good pizza.
I never agreed with Amazon’s limited convenience store focus that shunned fuel stations. Instead of building Amazon Go stores, I believe Amazon should have acquired 7-Eleven, Circle K, Yesway or Casey’s, proven C-store chains, and eventually installed their JWO technology inside the stores they acquired. Amazon can still do this.
Another option Amazon can pursue is acquiring Dollar General, which operates over 19,000 stores.
Amazon can also implement an industry-first pharmacy program, enhanced grocery ordering and pickup, and a special convenience store Prime program for food and fuel.
Andy Jassy must take command and control of the grocery and convenience business once and for all. No more BS six-pagers with their outlandish claims of how Amazon will revolutionize the convenience store industry through technology and a new store format.
Andy hasn’t received the best advice for what Amazon should do as it relates to their convenience strategy. Andy should kill the Amazon Go brand and close the stores. Amazon acquired Whole Foods for groceries. They should acquire a C-store for their convenience strategy.
Andy should rename the AmazonFresh stores Whole Foods +.
Finally, I hope Andy will partner with Microsoft and OpenAI to make Alexa the voice of ChatGPT AI.
