In the past, I have written fairly extensively about the impact Amazon Go could have on retail and how retailers should be thinking about its threats and related opportunities. Last week I visited the Amazon Go location in Seattle and came away with a few additional thoughts – about the concept, about the experience and about how retailers should be thinking about it.
Let’s start with the experience. In a word, it was very Amazon. Friction-free, neat and tidy, and extremely efficient. It literally is just walk out technology.
My colleague and I visited the store twice. The first time, we both scanned into the store, separated into two distinctly different shopping journeys, and then reunited and left together – she with some yogurt and fruit, me with a bottle of water and an Amazon Go branded chocolate bar. Before we got to the end of the block, we had both received our receipts. It was, well, so Amazon. It wasn’t particularly inspiring, but it was efficient – much more efficient, in fact, than when I had to stand in a queue at Amazon Books earlier this month.
Our second visit was more deliberate. We were discussing the technology itself and wanted to try and “trick” the system. This time I scanned her as a companion, we traveled together to the special chocolate bars where she took one and I took two, trying to understand if the weighted shelf sensors and other video based technologies would pick up the quantities. Again, we just walked out of the store. This time, it took almost 15 minutes to get the receipt, which left me feeling like someone had to go to the video and validate the purchases. I have no idea if this is true or not, but it certainly felt that way.
While the experience was fine – neither super inspirational or particularly experiential – what was impressive about the store was its technology. Impressive primarily in scale. I have never seen so many sensors in one place, and that includes our Customer Experience Center lab at RetailNext’s corporate headquarters where we test every kind of tech we can get our hands on.
Of course, much has been speculated about the technologies Amazon is likely using. I’ve read about everything from video with machine learning to smart phone tracking, from smart shelf capabilities with weight sensors to SKU-level RFID tagging. From what I saw, there is no RFID in the store, but the other technologies are on pretty clear display. The big question to me was, how do you drive ROI, particularly in tiny convenience stores, where margins are so very slim?
But, setting costs and ROI aside, in terms of opening your imagination to the art of the possible, this experience is fantastic.
So, what does this mean for retail? In my mind, it simply reinforces many of the themes we discuss day in and day out at RetailNext. First and foremost, a brand or retailer has to decide what it wants to be, and what its unique positioning should be – are you in the business of convenience, lowest price, experience or something else? Secondly, its critical for a brand to examine who its targeted customers are and what they want and expect. Lastly, a brand must take an introspective look at its delivered shopping experience and identify any gaps between what’s being delivered and what shoppers value most – those friction points that once eliminated establish your differentiated competitive advantage and lift your brand to that of a retailer of choice.
Amazon Go simply addresses the primary friction point of convenience stores, that being they aren’t exactly that convenient for those wanting to “grab and go” if there’s more than one other shopper in the store. With Amazon Go, Amazon set out to eliminate the checkout queue, and in that regard, they deliver in spades. A very Amazon experience.
Amazon’s challenge to retail is straightforward: What are the friction points in your delivered shopping experience and what are you doing about them?
- The Retail Revolution: Why Incremental Change Isn’t Working Blog
- Essential Store Metrics Begin at the Front Door Blog
- An Amazon Go Q & A with RetailNext’s Arun Nair and Bridget Johns Blog
- Amazon Go – Time to Panic? Blog