Over the last couple of years Amazon has been increasing its presence in the brick and mortar market, having already secured its place as one of the top online retailers in the country—if not the top online retailer in the country. The company has opened a handful of brick and mortar locations in major cities throughout the United States as a way of integrating its high-tech brand into a physical space. Now, it plans to venture into a new type of physical space: the alcohol market. The company announced recently that it hopes to open a brick and mortar liquor store in San Francisco’s Dogpatch area. Before you get too excited, though, read the fine print.
Amazon’s Venture Into Brick And Mortar
Think of the first physical thing that pops into your head. Now look it up on Amazon. Odds are high, assuming you didn’t think up a pet, that you can easily find that item within Amazon’s seemingly endless catalog of items. The company, which relies on third-party sellers to go through the platform’s drop-shipping business, connects millions of consumers to items from around the world in seconds, shipping right to their door in a matter of hours. Amazon itself carries very little stock, sticking to basics that are commonly sold through the website.
Things like sheets, teapots, and USB ports commonly carry the “Amazon Basics” label, but the majority of what consumers can find on Amazon is sold through a third party, where the third party sends and stores its items in an Amazon shipping warehouse around the country. This low cost business model allows Amazon to take a portion of every sale made through its platform, without having to go through the hassle of manufacturing and carrying a wide array of items. One of the few things consumers can’t often get on Amazon, though, is beer, wine, or liquor—unless they’re in one of the few cities that deliver alcohol via Prime Now.
When the company acquired Whole Foods back in 2017, it promised to use the opportunity to lower prices and integrate Prime memberships into the Whole Foods Shopping experince. The company also, simultaneously, began venturing into brick and mortar under its own name with the arrival of the first couple of Amazon Go stores in Seattle and New York. The stores use high tech RFID technology to track Amazon Prime shoppers and charge them automatically, eliminating the need for the checkout process altogether.
Amazon’s brick and mortar liquor store mean that customers will be able shop whenever they want. The 200 square foot storefront in Dogpatch would serve customers in the area, though many have opposed to the idea of Amazon taking over another business opportunity. The proximity to the warehouse would also mean that the company could venture into alcohol delivery in San Francisco, though this is its first brick and mortar liquor store.
Since many liquor stores in California are small, family-owned businesses, it would mean taking customers from a local store and giving that money to Amazon. The company has made headlines in the past for its role in gentrification, particularly when it wanted to open a headquarters in Queens, New York—an area that would have caused rent to become unaffordable for many of the people that live there.
Amazon has not said when it plans on opening its new brick and mortar liquor store.