In many ways, Amazon.com's (AMZN) bricks-and-mortar and grocery efforts still seem to be in the trial-and-error stage.
Bloomberg reports that Jeff Bezos' firm, which now runs 21 cashierless Amazon Go convenience stores, plans to launch pop-up kiosks and full-blown supermarkets as large as 30,000 square feet that also rely on Go's technology. It also states -- in line with a September CNBC report -- that Amazon is thinking about licensing Go's technology platform, which relies on cameras, sensors, servers, software and machine learning algorithms, to third-party retailers.
Amazon is said to still be undecided on a licensing model for Go, with options under consideration including "charging an upfront fee for use of the system or a percentage of total sales of a Go-equipped store." CNBC previously said that the company has held licensing talks with an airport store chain CIBO Express and Cineworld's Regal movie theater chain.
Microsoft (MSFT) has been working on its own cashierless store technology, and can use the fact that it doesn't compete against retailers as a selling point. But from a technology standpoint, Amazon has a head-start here. And though the company might choose to be selective about which types of retailers it licensing Go to, such deals could provide additional business for AWS, which (perhaps via edge computing services) would likely handle the platform's back-end infrastructure.
Notably, the plans to launch Go supermarkets -- said to be made possible by technology advances -- are separate from Amazon's recently-disclosed plans to launch a low-cost grocery store chain that would be separate from Whole Foods. Bloomberg says that those stores, the first of which will open in Woodland Hills, CA next year, will have human cashiers.
If it works as well as it does within present-day Go convenience stores, Go's technology could be a valuable differentiator for a chain of Amazon-owned supermarkets. But for those shoppers accustomed to having a store employee bag the groceries they buy at a supermarket, the convenience factor might not be as high as it is for a Go convenience store who's simply looking to grab an item or two and walk out.
Meanwhile, Amazon is also less than a month removed from making its Amazon Fresh grocery delivery service (available in 21 metro areas and counting) free for Prime members (it previously cost $14.99 per month). And it continues expanding the reach of its Prime Now rapid-delivery service, which among other things provides free Whole Foods deliveries. Both services typically have a $35 order minimum.
The elephant in the drawing room as these sometimes-overlapping efforts unfurl: Adoption of online grocery services (both pickup and delivery) from bricks-and-mortar retailers has been growing at a rapid clip. Walmart (WMT) in particular has been seeing strong uptake for its online grocery services, which in practice can be used to order almost anything sold at a physical Walmart store.
Of these various efforts, Amazon Fresh might be the one that could have the biggest impact in the near-to-intermediate term. It's a service that's cost-competitive with Walmart and traditional supermarket chains in a way that Whole Foods isn't, and Amazon can likely expand its availability much faster than it could expand a physical grocery store chain, with or without Amazon Go.
In addition, while Amazon is likely to lose money on Amazon Fresh in the near-term, the company might be uniquely-positioned not to lose large sums of money scaling out a service like this, thanks to its huge fulfillment and logistics/delivery investments, its purchasing power and its ability to use Prime membership fees to help subsidize the service.
As for the grocery store plans, it looks as if Amazon is still exploring its options. Whether featuring Go's technology or human cashiers, a large, nationwide, grocery store chain would probably take many years to build out. And so at this early stage, it makes sense for the company to experiment with different bricks-and-mortar approaches, while also investing in a grocery delivery business that doesn't necessarily need bricks-and-mortar stores to scale.
A look at Amazon's history makes it clear that not every bet it makes pays off. But it also shows that the company has generally done a good job of learning from its mistakes and quickly doubling or tripling down on those bets that do pay off.