Yesterday’s rumor that Amazon is considering opening 3,000 Go stores in the next three years sent shockwaves through the grocery and retail markets. Certainly, were Amazon to invest the billions of dollars needed to build out such a physical footprint needed to reach that scale, it would likely pose significant challenges for incumbent retailers, quick-serve restaurants, convenience stores as well.
However, given that Amazon is scheduled to close on its acquisition of PillPack by the end of the year — a story which itself sent its own respective shockwaves through the healthcare markets — another interesting angle on the “thousands of new Amazon stores” story is that of pharmacies and healthcare. With PillPack, Amazon will get pharmaceutical licenses in almost every state. What would that mean for CVS, Walgreens, Walmart, Rite-Aid, grocery pharmacies, and the rest?
While Amazon has made several high-profile healthcare-related hires lately, we haven’t seen specific evidence that Amazon intends to provide physical healthcare services, a la Minute Clinics. But over time we think this is an area to keep an eye on given the potential revenue growth opportunity for Amazon.
Amazon is reportedly considering rapidly increasing its pace of investment in Amazon Go stores by opening up to 3,000 of them over the next 3 years. Per Bloomberg:
Amazon.com Inc. is considering a plan to open as many as 3,000 new AmazonGo cashierless stores in the next few years, according to people familiar with matter, an aggressive and costly expansion that would threaten convenience chains like 7-Eleven Inc., quick-service sandwich shops like Subway and Panera Bread, and mom-and-pop pizzerias and taco trucks. Chief Executive Officer Jeff Bezos sees eliminating meal-time logjams in busy cities as the best way for Amazon to reinvent the brick-and-mortar shopping experience, where most spending still occurs…
Amazon is targeting dense urban areas with lots of young, busy, affluent residents willing to spend a little more than a typical fast-food experience for better quality food, the people said. The target locations make it less of a threat to suburban gas station-convenience store combinations and more of a threat to big cities’ quick-service eateries, such as Subway Restaurants, Panera Bread Co. and Pret a Manger.
- Convenience stores have existed for a long time, but Amazon has unique data on consumer behavior and shopping patterns, and could positions its Go stores in locations it believes will be most likely to change behavior.
- Most convenience stores are currently located at or near gas stations, and typically primarily stock candy, soft drinks, snacks, beer, and tobacco products.
- We would view this as more of a threat to quick-serve restaurants, grocery stores, and (potentially) pharmacies.
For context, Amazon just opened its fourth Go store yesterday.
Expanding its push into the private label vitamin and supplement market, Amazon has launched three new kids vitamins products under its Mama Bear brand. The new items are:
Amazon recently launched 10 new adult vitamin products under the Amazon Elements brand as well. Other brand owners in the kids vitamin market include Bayer (which owns the Flintstones and One a Day brands), SmartyPants, and Rainbow Light.
Stay tuned to TJI for the latest developments as Amazon continues to expand its private label efforts.
Continuing its push into private label vitamins and nutritional supplements, Amazon has launched 10 additional products under the Amazon Elements brand. Prices range from $10 (elderberry complex) to $28 (super omega-3).
The new items are:
Amazon says in the product descriptions that these items are being manufactured by Arizona Nutritional Supplements out of Chandler. ANS is privately held and has raised funding from Endeavor Capital. According to Endeavor, ANS’s “customer base includes multi‐level marketers, specialty retailers, physicians groups and brand marketers selling through retail and online.”
Amazon has launched dozens of house brand vitamins and supplements under its Amazon Elements, Solimo, and Nature’s Wonder private label brands. Amazon and Whole Foods also sell vitamins and supplements under the “365 Everyday Value” house brand.
We expect Amazon to continue to expand its private label efforts in the vitamins and supplements category going forward.