Introducing the TJI Amazon Physical Retail Map

TJI Amazon Physical Retail Map – The Comprehensive Independent List of Amazon Physical Retail Locations
Now tracking 629 physical locations and venues.

Since 2015, when Amazon opened its first physical retail store (Amazon Books in Seattle’s University Village), Amazon has been growing its physical retail presence throughout North America. When Amazon acquired Whole Foods, it added hundreds of new locations. Now, Amazon operates over 600 physical retail venues, ranging from its Amazon Go automated food stores to its roving Amazon Treasure Trucks.

As Sears announces it is entering bankruptcy proceedings today,  Amazon continues to grow its physical retail footprint. But while Amazon has hundreds of physical retail locations, there’s no singular comprehensive reference for professionals and analysts to find all of Amazon’s physical retail locations in one place. That’s why we have created the TJI Amazon Physical Retail Map — the comprehensive independent list of Amazon physical retail locations.

Amazon Go (6)
Amazon 4-star (2)
Amazon Books (18)
Whole Foods Market (480)
Whole Foods 365 (10)
Allegro Coffee Roasters (7)
Amazon Treasure Truck (25)
Amazon Pop-Ups (67)
Amazon Smart Home Experience Pop-Ups (14)

From Amazon Go to Whole Foods 365 to Amazon Pop-Ups, and Everything in Between

The breadth of Amazon’s physical retail operations is increasing. The TJI Amazon Physical Retail Map tracks Amazon Go, Amazon 4-star, Amazon Books, Whole Foods, Whole Foods 365, Allegro Coffee Roasters, Amazon Treasure Truck, Amazon Pop-Ups, and Amazon Smart Home Experience Pop-Ups locations. As Amazon adds more, we’ll track them, too.

Dive In

Amazon continues to create new products and services regularly, and we expect the number is only going to grow.

TheTJI Amazon Physical Retail Map is a starting point for researchers and analysts to navigate Amazon’s physical retail portfolio.

For professionals serious about tracking Amazon’s products and services on an ongoing basis, subscribe to TJI Intel, which covers the latest developments across Amazon’s retail efforts.

The Strategy Behind Amazon’s Private Label Push: Customer Loyalty, Supplier Leverage, and Long Term Margins

Amazon created its first private label brands about a decade ago. But lately, something’s changed — Amazon is ramping up its private label brand portfolio in a massive way. What’s going on? Big picture, we think there are three vectors to Amazon’s private label efforts: customer loyalty, supplier leverage, and long term margins.

A Customer Loyalty Strategy

Consumer products companies have spent billions of dollars over decades to build brand loyalty. Why? Because building brands works: customers with a brand affinity stay loyal over time.

Along those lines, we believe Amazon has decided it is a strategic priority to build customer loyalty and preference through the development of private label and exclusive brand products. In a world with an ever-increasing number of “microbrands” and DNVBs, Amazon is betting that customers who find quality products on Amazon that they can’t get anywhere else will become more loyal to Amazon and spend more on Amazon over time because of their loyalty to those private brands.

From this perspective, Amazon is incentivized to build private brand products in as many categories as possible. This is generally good news for private label manufacturers who have built their businesses serving large retailers like Walmart and Target (and who are now increasingly shifting their efforts to serving Amazon) — though they are more easily replaceable than owners of established consumer brands.

In our view, there’s no reason why Amazon shouldn’t offer a private brand option (if not multiple private brand options) for most product categories it sells. Some will succeed, and others won’t. In addition to creating loyalty to private brands, the overall effect of increased selection and value should strengthen Amazon’s position as a first-stop destination in consumer shopping habits, driving traffic and sales for all Amazon vendors and sellers.

A Supplier Leverage Strategy

Amazon Prime has built significant loyalty and habit in consumer purchase behavior since it launched in 2005 — not through retail brand loyalty, but through the sunk cost psychology of pre-paid shipping. It’s one of the amazing business accomplishments of our time.

But Prime is not without its vulnerabilities. Chief amongst them: most of the brands that Amazon sells are owned by other companies. The probability that some companies that own the brands that Amazon’s customers have built loyalty to over time might at some point have sufficiently different incentives than Amazon is non-zero.

For example, one fundamental strategy conflict: brands might increasingly feel like Amazon is not offering the differentiation they want for their products on its marketplace.

Amazon aggregating everyone else’s value chain into their channel, while diluting external Brand value in general, is sort of scary… Just wonder when this starts to rub off on already established brands. Amazon wants a Brand-Free future where they hold the keys to the consumer’s purchase point, on their terms. (Jordan Rice, via Twitter)

The question of whether Amazon and other technology platforms have the potential to change the fundamental nature of brand psychology and create a “brandless” future is an interesting one. The increasingly sophisticated private label efforts from Amazon and others will affect some product categories more than others: categories that are more easily commoditized will see faster and greater disruption, while customers will always have enduring affinity for truly differentiated products.

Big picture, there appears to be a sense of urgency at Amazon to build out its private label portfolio as quickly and broadly as it can to accelerate the process of introducing its customers to its own brands so that, in the long run, if some brand owners decide their incentives aren’t sufficiently aligned with Amazon’s, Amazon will be able to fulfill (ideally large portions of) that demand with (ideally very comparable) private brand products to satisfy as many customers as possible. The better private brand alternatives Amazon can create, the more leverage it will have with suppliers.

A Long Term Margin Strategy

Jeff Bezos is reputed as saying, “Your margin is my opportunity.” Given Bezos’ and Amazon’s long term perspective, margins that look terrible to many other businesses can look attractive to Amazon. That steely view has led Amazon to make investments others haven’t.

Once Amazon establishes more of its own brands and builds loyalty to them over time, it should be able to extract attractive gross margins from the sale of those items, especially compared to the low margins it and most retailers usually earn when selling third party brands.

Could Amazon someday even create luxury brands? (And if so, could Amazon even only offer some brands through certain types of its own physical retail stores one day?) Maybe, but first it must prove that it can move beyond low-emotion private label brands like “AmazonBasics” that primarily compete on price and create a portfolio of brands that have sustaining appeal to different customer segments.

If it can, then private label could be a significant source of margin for Amazon over time — that Amazon can then use to invest in its next “low-margin” business.

Amazon Ends Instant Pickup Service

Last year, Amazon launched Instant Pickup at five locations on US college campuses where it was already operating regular Pickup Locations. The service allowed customers to order certain items and then retrieve them a short time later from nearby lockers, somewhat akin to a vending machine that you could order online from and then go pickup yourself. Amazon made available items like phone chargers, snacks, and drinks, which were placed in the lockers by an Amazon staffer after the order was placed.

“I want to buy a can of coke because I’m thirsty,” Ripley MacDonald, Amazon’s director of student programs, said at the time. “There’s no chance I’m going to order that on Amazon.com and wait however long it’s going to take for that to ship to me.”

Today, Amazon said it has ended the program. Its regular Pickup Locations efforts will continue at these locations.

Instant Pickup was an interesting experiment for Amazon to test out stocking items that fit the impulse purchase scenario at its Pickup Locations.

Since last year, Amazon has expanded its retail efforts substantially, through the growth of Amazon Books, the launch of Amazon Go stores in Seattle and Chicago, and the launch of the first Amazon 4-star store in New York City.

Amazon is Opening a “4-star” General Store in Manhattan Tomorrow

Amazon is doing a lot of physical retail experiments. It is opening Amazon Books stores in several cities, has opened 3 Amazon Go food stores in Seattle and 1 in Chicago, has physical presences in a variety other retail venues, and drives a few Treasure Trucks around.

Today, Amazon has just announced it is opening its first “Amazon 4-star” store at 72 Spring Street in the SoHo neighborhood of New York City tomorrow. The store will only sell items rated 4 stars and above on Amazon, but those items will cut across product categories. Per Amazon:

We started with some of the most popular categories on Amazon.com including devices, consumer electronics, kitchen, home, toys, books, and games, and chose only the products that customers have rated 4 stars and above, or are top sellers, or are new and trending… Digital price tags alongside every product show the Prime price and list price, as well as Prime member savings, average star rating, and the total number of reviews a product has received.

Our take:

This is the first time we’ve seen Amazon open a physical general merchandise store. While it doesn’t sound like Amazon 4-star will carry the sundries that one might expect in a Dollar General (which plans to open 900 new stores in 2018 itself), it’s easy to see how Amazon might blend different elements of its retail concepts over time to include food and necessities with the toys, games, kitchen appliances, and home goods Amazon says it plans to sell in 4-star.

Positioning “4-star” as a store with higher quality makes sense, given that Amazon’s brand is often founded more on price than curation, and this store is located in SoHo. (Perhaps Amazon will feature some of its private label goods as well?) Finally, many of the features Amazon describes (“Most Wished For,” etc.) can also be found in existing Amazon Books stores.

What if Amazon Put Pharmacies in 3,000 Go Stores Across America?

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.

Is Whole Foods Driving Prime Membership Growth?

When Amazon bought Whole Foods a year ago, a common theory behind the rationale was that Prime could drive traffic to Whole Foods through membership deals. But are long-time Whole Foods shoppers who are not Prime members also more likely to join Prime because of those deals?

Per a survey from consumer research firm InfoScout, it appears that for many, the answer is yes.

InfoScout notes:

In addition to analyzing purchase data from Prime member shoppers, we fielded an InfoScout survey to understand how 1,006 long-time Whole Foods shoppers (people who had made Whole Foods purchases both pre- and post-Amazon acquisition) perceived the changes taking place in-store.

Of the surveyed shoppers, 11.2% claimed not to be Prime members, but 64.6% of those non-Prime members said they were considering Prime membership. The top reason for considering Prime? Access to in-store Whole Foods discounts (68.5%), followed by ease of shopping on Amazon (63%), and ability to get Prime shipping on Amazon (61.6%). The in-store discounts are clearly working toward Amazon’s ultimate goal – driving more Prime memberships.

Amazon, Samara Acquire “More” Retail Grocery Chain in India

Further its investment in India, Amazon and Indian private equity firm Samara Capital have acquired the More chain of retail grocery stores in India from Aditya Birla Group.

Samara will buy 51% and Amazon will buy 49%, to avoid regulatory restrictions that apply in situations of foreign majority-ownership. The total price was about USD $580 million. Per BusinessToday.in,

The deal will take care of ABRL’s debt that stood at Rs 4,000 crore as of March 2018. Once the process is complete Samara Capital and Amazon plan to rapidly expand the chain which was put on hold due to its burgeoning debt. They plan to set up 100-150 stores every year including neighbourhood supermarkets and hypermarkets. The plan for the current fiscal is to set up 90 stores.

Our take:

Amazon is continuing to heavily invest in India. India is a strategic growth market for Amazon, with intense competition from Walmart’s Flipkart and others. Owning (almost a majority of) a retail grocery chain will give Amazon a physical footprint through which it can accelerate the deployment of other services in the country.

Amazon Reportedly Planning on Opening Up to 3,000 Amazon Go Stores in 3 Years

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.

Our take:

  • 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.

Amazon Go Rollout: Store #4 Opens Today in Chicago

As we continue to track the rollout of Amazon Go stores, Store #4 opened today in Chicago at 113 S Franklin St.

It is on the first floor of the building that houses Amazon’s Chicago offices in the Loop. It is also the first Go store to launch outside Seattle, and the third to launch in the last month.

To recap, here’s a timeline of all Amazon Go launches to date:

  1. Seattle – Opened 1/22/18. Address: 2131 7th Ave.
  2. Seattle – Opened 8/27/18. Address: 920 5th Ave.
  3. Seattle – Opened 9/4/18. Address: 300 Boren Ave N.
  4. Chicago – Opened 9/17/18. Address: 113 S Franklin St.

Amazon has also posted job listings for upcoming Amazon Go stores it plans to open in New York City and San Francisco.