Amazon (NASDAQ:AMZN) has never been conventional. Turning the book buying experience on its head — when people actually bought books — was simply proof of concept for founder and CEO Jeff Bezos. After he saw that he could successfully build an online store that could out-compete traditional major retailers in a low margin business and that he could scale that business to compete nationally, it was the beginning of something bigger than most people imagined, and the inevitable rise of AMZN stock.
Granted, Bezos’ timing was pretty good as well. Had he been a little earlier or a little later to the idea, AMZN stock may not be where it is today.
Another thing Bezos did that has been disruptive for many years and still stokes some analysts’ scorn is the fact that Amazon doesn’t have a pile of cash sitting around in case something bad happens.
Most of the money that rolls in from its various operations are redeployed into new ideas. Much of this hung off its retail operations for many years until Amazon Web Services (AWS) — its cloud computing company — matured and began to help dump even bigger amounts of cash into the parent company’s coffers.
And it’s usually the internal ideas that generate the most success. For example, AMZN’s purchase of Whole Foods grocery chain has suffered from some transitional challenges getting up to speed as the “Amazon Way” was incorporated.
There are plenty of great ways to leverage Whole Foods, but one of the best is what has the distinctive DNA of AMZN: Amazon Go.
Why Amazon Go Will Add More Shine to AMZN Stock
Amazon Go are cashierless stores. It launched a couple prototypes, as AMZN always does with new retail ideas, but it has recently announced that it is ready to launch in earnest.
Earlier in September, Amazon announced that it plans to open 3,000 Amazon Go stores around the U.S. by 2021. That’s about 1,000 stores a year and we’re almost done with 2018.
Basically, you download the Amazon Go app onto your phone and open it when you go into the store. And that’s it. You grab whatever you need, and walk out. Like Lyft or Uber, you’re sent the receipt and it’s deducted from your account. Frictionless shopping.
Apparently, if there are large numbers of people in the stores, it makes it harder for the app to function properly and that’s why the app is for Amazon Go convenience stores and not, say, Whole Foods.
Amazon recently opened its first store outside its Seattle home base. The Chicago store is located near Amazon offices in the Windy City, and the 2,000 square-foot store is attracting big crowds.
From the consumer side, these “just walk out shopping” stores will be very popular. From the AMZN side, it’s great way to leverage almost every aspect of its current businesses.
And don’t be surprised if these Amazon Go stores start to feature Amazon branded product lines that will also help grow brand recognition, help boost Whole Foods, AMZN e-commerce and ultimately AMZN stock along the way.
Louis Navellier is a renowned growth investor. He is the editor of four investing newsletters: Growth Investor, Breakthrough Stocks, Accelerated Profits and Platinum Growth. His most popular service, Growth Investor, has a track record of beating the market 3:1 over the last 14 years. He uses a combination of quantitative and fundamental analysis to identify market-beating stocks. Mr. Navellier has made his proven formula accessible to investors via his free, online stock rating tool, PortfolioGrader.com. Louis Navellier may hold some of the aforementioned securities in one or more of his newsletters.
