Amazon has spent two decades trying to disrupt Walmart’s dominance. Now, it appears the e-commerce giant is taking those efforts to a whole new scale.
A new proposal for a massive, 229,000-square-foot Amazon facility in suburban Chicago looks and feels a lot like a classic Walmart superstore, albeit with distinctive Amazon elements such as the ability for shoppers to purchase items from the main floor or via app or kiosk from the back of the store.
The company describes the plans as part of its culture of experimentation — calling it “a new concept that we think customers will be excited about.” Amazon says the store will offer fresh groceries, household essentials, and general merchandise, making it convenient for customers to shop a broad selection of items in one trip.
“This could just be another experiment, but as experiments go, it reveals a degree of Walmart jealousy that we didn’t expect,” wrote analysts Mike Levin and Josh Lowitz of Consumer Intelligence Research Partners (CIRP), in a report to subscribers this morning.
CIRP notes that while Amazon dominates e-commerce, online shopping accounts for less than 20% of U.S. retail spending, leaving the vast majority of consumer dollars on the table.
Amazon has tried a variety of physical retail formats over the years, with mixed results, in addition to its acquisition of Whole Foods for $13.7 billion in 2017. Whole Foods CEO Jason Buechel was named a year ago to oversee Amazon’s Worldwide Grocery Stores business, including its Amazon Fresh stores.
The company says it already serves more than 150 million grocery shoppers in the U.S., generating over $100 billion in grocery sales in 2024.
But with data showing that 93% of Amazon customers still shop at Walmart, CIRP suggests this new superstore concept is Amazon’s admission that capturing the remaining addressable market requires building a physical moat that rivals the scale and utility of its biggest competitor.
While the footprint screams “traditional big box,” the plans signal that Amazon is attempting to put its own spin on the superstore format.
Filings with the Village of Orland Park indicate that a large portion of the building’s floor plan is designated for “back of house” operations that support in-store and pickup orders. Part of the idea is to solve a headache that plagues modern grocery stores: the clash between in-store shoppers and gig-economy workers.
During an Orland Park planning commission hearing, an Amazon rep described a tech-enabled experience where the digital and physical worlds merge for general merchandise.
A customer might find a sweater on the rack in blue, but want it in red. Instead of searching through piles of inventory, they could use a dedicated app or in-store kiosk to request the item from the back room, picking it up at the front counter when they are finished shopping.
This is similar to an Amazon experiment at its Whole Foods locations — building a “store within a store” to bridge the gap between niche organic offerings and mass-market items.
Amazon last fall unveiled an automated micro-fulfillment center attached to a Whole Foods in Plymouth Meeting, Pa. The concept allows shoppers to browse organic produce in the aisles while simultaneously ordering non-Whole Foods items — like Tide Pods, Pepsi, or Doritos — via an app. Robots in the back pick the items, and the full order is ready for the customer on site.
The Orland Park superstore appears to be an industrial-sized evolution of that experiment.
“We like to explain it as: ‘It’s the best that Amazon has to offer under Whole Foods, Fresh and their online offerings,’ ” said Katie Jahnke Dale, a lawyer representing Amazon at the hearing.
The site plan includes dedicated queuing areas for delivery drivers and separate pickup lanes for customers, streamlining the flow of goods without disrupting the in-store experience.
The planning commission voted 6-1 to recommend approval of the project. The proposal now heads to the Orland Park Village Board of Trustees for a final vote, which is scheduled for Jan. 19. If approved, village officials estimate the store could open in late 2027.
Read the full article here
