Amazon is rolling out a strategy that, at face value, seems counter intuitive – it’s opening grocery stores across the US. But why would a company that is famous for selling online want to do that?
Sometimes you need to throw a sprat to catch a mackerel, and it appears this is precisely what Amazon is doing – or maybe not precisely, but metaphorically, anyway.
According to the Wall Street Journal, Amazon is planning a programme of opening new grocery stores where you will be able to buy an assortment of products. It is being called Project Como.
It said: "The Seattle company aims to build small brick-and-mortar stores that would sell produce, milk, meats and other perishable items that customers can take home. . . Primarily using their mobile phones or, possibly, touch screens around the store, customers could also order peanut butter, cereal and other goods with longer shelf lives for same-day delivery."
So why, oh why would Amazon want to do that?
Well for one thing it has a cunning marketing plan. You go into the store to buy fresh and perishable goods, but there are points in the store for ordering the non-perishable goods. So the stores effectively become advertisements for buying online.
But there is another even more cunning plan.
It's about cost effective logistics. Amazon needs local storage, places where customers can collect, places from where its drones can deliver direct.
But it becomes so much more economic if the storage units double up as stores.
As Wired explained, it is the same logic as keeping a store open for 24 hours and at times when customer through-put is tiny, but providing the staff use the dead time for filling shelves and preparing for the customer the rush.