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Amazon’s Next Venture: Convenience Stores?

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After establishing its first brick-and-mortar store and rolling out a nationwide pop-up presence, Amazon may be tackling another physical store concept: the convenience store. The e-Commerce giant may build small brick-and-mortar stores that would sell produce, milk, meats, and other perishable items, according to a report from The Wall Street Journal.

Amazon has not commented on the report.

Internally dubbed “Project Como,” the convenience stores are exclusively intended for customers of the company’s AmazonFresh online subscription service. The report said that Amazon also would begin rolling out designated drive-in locations for curbside pickup, where online grocery orders would be brought to the shopper’s car.

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As part of the store offering, shoppers would be able to order items using their mobile devices or in-store touchscreens for same-day delivery, in addition to the option of simply driving up and collecting orders placed online. This bundle of options is designed to capture the large share of consumers who prefer to pick out their produce or who bring home their groceries on the way from work.

The first of these convenience stores appears to be under construction already in Seattle, according to a report from Geekwire. Planning documents from the city of Seattle reveal a description of the numerous services the store will offer:

“When placing an online order, customers will schedule a specific 15-minute to two-hour pick up window. Peak time slots will sell out, which will help manage traffic flow within the customer parking adjacent to the building. When picking up purchased items, customers can either drive into a designated parking area with eight parking stalls where the purchased items will be delivered to their cars or they can walk into the retail area to pick up their items.”

With the curbside pickup service, Amazon appears to be following in the footsteps of Walmart, which expects to offer same-day curbside grocery pickup at approximately 600 U.S. locations by the end of 2016.

The online grocery industry reels in approximately $12 billion in revenue each year, amounting to nearly 2% of total grocery sales within the U.S. The industry is projected to grow at an annualized rate of 8.7% to $18.8 billion in 2021, according to data from IBISWorld. With Amazon continuing to add various services to its Fresh subscription — and even eliminating Fresh’s $299 annual price in favor of a $15 monthly fee for members of its $99 Prime product delivery service — it’s clear the retailer sees the value in an opportunity to ride this wave of growth.

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