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Exploring Amazon’s Appetite for More Retail Outlets

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Plans to open more Whole Foods stores

Amazon (AMZN) is planning to open more retail outlets under its Whole Foods brand, the Wall Street Journal has reported, citing people familiar with the matter. Amazon gained more than 450 retail outlets when it acquired Whole Foods in 2017.

In addition to opening more Whole Foods stores, Amazon is planning to open more Amazon Go stores, its cashierless retail outlets. The company is targeting airport locations for more Amazon Go stores, according to Reuters. The global airport retail market was valued at $38 billion in 2016 and is poised to grow to $49 billion by 2021, according to GlobalData estimates.

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Speeding up deliveries

Amazon’s opening more retail locations is seen as part of its strategy to speed up deliveries. For example, opening Whole Foods stores where none currently exist could help Amazon extend its grocery pickup service to more customers. Amazon currently lets customers in more than two dozen cities pick up their groceries from a nearby Whole Foods store in as little as 30 minutes. The company is planning to roll out the pickup service to more markets.

A wider store network could also help Amazon cut the distance its couriers need to cover to deliver packages to homes, resulting in faster delivery.

Online retailers expanding offline

JD.com (JD) and Alibaba (BABA) are two other major e-commerce companies that have been opening physical outlets or partnering up with traditional retailers to get closer to customers and speed up deliveries. 

As e-commerce companies seek to extend their offline reach, traditional retailers such as Walmart (WMT), which already boasts an extensive physical store network, are seeking to extend their online reaches. Walmart is one of the traditional retailers that have adopted Google (GOOGL) products, such as Google Express, to help them sell more online.

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