Opinion: Amazon should follow Coke into coffee shops

The rise of ecommerce and click and collect makes you wonder whether, as well as generating sales in their own right for their owner, coffee shops could become distribution points for urban online shoppers.

Coffee shops are often small and space limited, but this hasn’t stopped convenience stores becoming key collection points for online shopping orders through services such as Parcelly and Collect+.

Such tie-ups allow retailers to give customers the control of their orders they so desperately crave.

“Amazon’s takeover of Whole Foods is proof that it will happily get physical if it needs to”

There are other opportunities too. With the insight available to retailers from data analysis, it’s possible to forecast which products sell at which rate.

If a retailer knows what quantity of a specific product they sell in a small geographical area in a set period of time, why not have the product – particularly small items – stocked in that area rather than in a central warehouse?

This gives the customer the option of collecting their purchase immediately after they place an online order, or having it delivered by a last-mile courier such as OnTheDot.

With that level of insight, stores – or coffee shops – become warehouses in their own right. Automated in-store solutions with a focus on speed of transaction mean many stores now have, or can create, extra space because self-serve kiosks take up a smaller area than a traditional checkout. There may be opportunities to change the format of stores to allow for some of the space to become an out-of-sight storage area.

Online retailers are increasingly interested in taking advantage of bricks-and-mortar opportunities – Amazon is an obvious example, following its unexpected acquisition of Whole Foods.

Prime opportunity

Perhaps coffee chains such as Costa could be another opportunity.

Amazon is diversifying apace. It is understood to be considering an insurance comparison site, which demonstrates how widely it is thinking about moving away from its original core offering, having had great success with video and music streaming services for Prime members.

Its takeover of Whole Foods is proof that it will happily get physical if it needs to. The idea of Amazon buying a coffee chain is not unrealistic.

It could mean another benefit for Prime members, such as reduced price coffee or functionality in the Amazon app that allows customers to pre-order, much like the Starbucks version, which wouldn’t be available to non-Prime customers.

Costa has 2,422 locations in the UK Amazon could have delivered from, to facilitate customer order collections and provide Prime members with an additional perk.

“Amazon isn’t the only retailer that could purchase a business with a large number of physical locations”

Acquiring Costa would have made a lot of sense, especially because its like-for-like sales were down in the first quarter and reduced footfall was a key reason for that.

Amazon isn’t the only retailer that could purchase a business with a large number of physical locations, and with Costa no longer an option there are alternatives.

There are 8,500 betting shops in the UK and with new regulations restricting betting stakes, 3,000 are thought to be at risk of closure.

Might a retailer purchase some of these? Well, maybe not. Many shoppers would find betting shop environments offputting.

But coffee shops? In this new age of retail, anything could happen.