The first brick-and-mortar location for the online retailer will resemble a 1950s drive-in diner rather than a traditional supermarket
Last month, Amazon announced it would be opening a drive-in grocery store as well as convenience store locations in a move from online to on-the-ground. Now, in its hometown of Seattle, the online retailer prepares to open its first brick-and-mortar location, a drive-in grocery store that will harken back to a 1950s drive-in diner more than a regular supermarket, the Financial Times reports.
This location features a large awning to house customers, who will order groceries online, then drive to the pickup location, where someone will bring out their order. Amazon has been expanding its Amazon Fresh grocery delivery for a while; the service is now available in 17 markets. However, Amazon only has 1% of the U.S. grocery market.
“Grocery is the company’s biggest potential for revenue upside,” said John Blackledge, an analyst with Cowen. Blackledge estimated that Amazon is on track to increase its food and beverage sales from $9 billion in 2016 to $23 billion by 2021.
Despite the rapid growth of online sales, more than 80% of U.S. retail sales are from physical locations. “You can only grow faster than the market for so long before the law of large numbers catches up with you,” said Scott Jacobson with Madrona Venture Group. “You have to go after a few different markets—and this is a different market.”