Will Amazon’s New Store Be Built for Gen Z?

On March 1, The Wall Street Journal published a story about Amazon’s next retail concept. The stores, estimated to be 40,000 to 60,000 square feet, would in our opinion mirror a mini-Target or Walmart, selling a combination of groceries and other household goods, including clothing, health and beauty items and of course electronics. The reason for that speculation is the lease specifications make the store requirements flexible and not limited to groceries. I think it will be a smaller version of those, with an assortment of foods and goods for the mainstream.

What's interesting to me is that they are going into shopping centers—they'll be able to get great rents. The draw for food where we shop more often than for any other things will bring traffic into those stores and use as a hook to sell all the other Amazon products. I also see them building these stores with a lot of technology (not cashierless), with things such as mirrors in the clothing/beauty areas that allow you to try on clothes or put on makeup with just a touch of a button. Remember that millennials and Gen Z like brick-and-mortar stores that offer an experience. That's what I think these stores will be built around. 

At the recent Fancy Food Show in San Francisco, a new research report from Mintel found that these two generations demand a different level of consumer experience when shopping brick-and-mortar, and they value experiential buying. Who better than Amazon to create the next generation of retail?

Amazon has announced more than 400 new Whole Foods stores and 4000 to 5,000 Amazon Go stores—so clearly what the company wants is to own grocery. Also, Philadelphia, New Jersey and Rhode Island have banned cashierless stores, so they will need something in these areas that work for the mainstream. Frankly, I think it’s a smart idea.