Amazon Go case study: The structure of retail business in USA. In 2019, the total revenue of Amazon was a little over $280 billion out of which $140 billion was made up by Amazon's e-retail business. Such sales numbers might not even be on the horizon for most other retailers around the world, but, when compared with Amazon's main competitor Walmart, they are dwarfed by its mammoth revenue of over $500 billion which continues to grow year-on-year. The main reason for this though is the accessibility that Walmart provides to its customers. Almost 90% of the population in the United States of America has a Walmart within 10 miles of their houses. If we consider the retail market in the United States alone, the total retail market is valued at around $5.47 trillion as of 2019 out of which $800 billion comes from groceries alone. However, out of this, only 10% and 2% respectively comes from online sales. Simply because people do not prefer to buy daily groceries online unless they can make sure that it's fresh and well stored and many other reasons. According to a report by Morgan Stanley, as of 2016, only $42 billion of grocery sales were made online. Both, Amazon and Walmart have enough room to grow in their respective business sectors and not cross their paths at least in the near future. However, Amazon's business strategy has made it very clear that it will expand wherever it sees an opportunity, and going head on with Walmart is its next big step in becoming the 'do-everything' company. As Nick Statt from The Verge states, "Amazon needs to become Walmart before Walmart becomes Amazon", and after Amazon's acquisition of Whole Foods Market in 2017, Amazon Go is its next step in that direction. Amazon Go comes into the picture In many of his interviews, Jeff Bezos has made it very clear that he sees Amazon's retail business to have the potential of making a revenue of over $ 1 trillion dollars from its retail business alone. It has hence always been suggested that Amazon's path to $1 trillion in revenues will be through groceries and through its acquisition of Whole Foods, Amazon has made it very clear that it has taken notice. 3 4 But, for Amazon it's not just about selling bread, milk, or ready to eat meals to its customers just because it can, but mostly about scale. A Bloomberg report suggests that there would be approximately 3000 Amazon Go stores, which when coupled with a report by Mark Mahaney from RBC, a global investment bank, Amazon Go can generate daily sales of $1.5million based on assumptions that it has a daily footfall of between 400 to 700 customers who shop for an average of $10 for 279 days a year. This shows a $4.5 billion annual revenue opportunity for Amazon Go. However, an Morgan Stanley report suggests, that opening up 3000 stores would lead to a projected cost of $3 billion, most of which would be due to the technology that is required to be installed in these stores. Further Prospects: Amazon Go is Amazon's way of bringing its machine learning and computing prowess to its newly set up retail business keeping its customer-centric approach at its core. Amazon's attempt here is to provide an experience to its customers that is seamless and would save their time. As RBC analysts Mark Mahaney puts it, "Almost like an experience of shoplifting, except its legal" Amazon has also started selling its Just-Walk-Out technology to other retailers which one can say its attempt to acquire as much data as possible to develop its machine learning algorithms to attain utmost accuracy. However, Amazon is not alone who has been using this system in its stores. BingoBox in China has been operating a similar kind of store with uses RFID technology to keep a track of products sold. Tencent has been using its WeChat payment app in partnership with EasyGo, a cashier-less startup in China. JD.Inc also known as Jingdong headquartered in Beijing has rolled out hundreds of stores in China which uses QR codes and RFID tags to provide a similar experience. Even Walmart has started working on its own approach of cashier-less stores using a scan to buy approach which when compared with Amazon, Amazon is way ahead in this game. Nevertheless, one cannot forget that Amazon Go coupled with its Whole Foods acquisition is Amazon's attempt to take on Walmart head-to-head at its own turf, and cashier-less technology is just its way to be as efficient and productive in the process. As of 2020, Amazon Go is fully functional in 27 locations in the USA. Amazon Go, even though quite ahead of its competitors and with all bells and whistles in place and sheer scale is still quite new in the retail space and its complete potential and feasibility can only be seen over time relative to its competitors.

CASE STUDY QUESTIONS 1. Amazon is an innovative online store which started in 1994 by selling e-books, and than widened its services to sell other products such as electronics, apparel, furniture and etc. What is the level of expansion that Amazon Go has taken, particularly in the field of Information Technology? 2. Perform SWOT analysis on Amazon Go through the usage of technology. 3. How far had Jeff Bezos have gone in Amazon's evolution in general by maximising it's dependence on Information technology at this era? 4. Analyse the strategies and business models that Amazon Go has in place to successfully grow and expand in the retail business.