Blog Post - Hugh Fletcher, Jan 23 2018

Is Amazon Go the future of retailing?

Is Amazon Go the future of retailing?

It's not gone unnoticed by many that Amazon has opened its first supermarket to shoppers without checkouts, human or self-service facilities, with the aim to revolutionise the way we buy groceries. In December 2016 we saw the first Amazon Go store open to employees, and now, following a period where they ironed out some teething problems, Amazon Go in Seattle is now servicing the public.

How does it work?

  • Using ceiling-mounted cameras and electronic sensors to identify each customer and track what items they select.
  • Purchases are billed to customers’ credit cards when they leave the store.
  • On entering the store, shoppers walk through gates similar to those in the London underground, swiping their smartphones loaded with the Amazon Go app.
  • Then they are free to put any of the sandwiches, salads, drinks and biscuits on the shelves straight into their own shopping bags.
  • There’s no need for a trolley or basket as you don’t unpack it again at the till. Unless you need to be ID-checked for an alcohol purchase, there’s no need for any human interaction at all.
  • Sensors on the shelves add items to the bill as customers pick them up and delete any they put back.

Watch the Amazon Go video:

We asked Hugh Fletcher, Global Head of Consultancy at Salmon, a Wunderman Commerce Company: What does the rising influence of technology in retail, Amazon’s increasing dominance and Amazon Go, mean for traditional supermarket chains? Here are his thoughts.

“We don’t yet know if Amazon plan to roll this out to the rest of the Go stores, but retailers watch out! The easier it is for customers to buy from a store, the more likely they are to return.

Technology continues to change the face of retail, and Amazon as a company is a driving force for this change. Although what Amazon does so well is harness what customers want (and don’t want) and harness technology to address these friction points. Its dedication to service has revolutionised the digitally-driven services landscape in retail. The launch of Amazon Go, the futuristic convenience store, caters to shoppers’ craving for a friction-free, convenient and seamless experience, and officially takes the once online-only platform further into the high-street. It’s an interesting concept, and many have argued that Amazon is looking to partially reverse the increasing consumer trend to shop online.

“However, the real aim is to use its customer-centric learnings from its online platform to improve physical shopping. Online shopping was first to disrupt the retail model as customers were given the option to purchase goods from the ease of their home. And Amazon Go may well be the next step in this experience. As to whether it’s good for retail, it might shake up the already declining influence of bricks-and-mortar stores and prompt them into rethinking ways to innovate their store to suit the convenience of the customer. Conversely, this could spell further trouble for the big supermarkets whose shares had already slipped following Amazon’s purchase of Whole Foods last year.

Amazon’s Go shop, and the most recently popular digital assistants such as Google Home and Amazon Echo, is designed with one thing in mind - to purposely navigate shoppers through certain platforms, cornering the market away from competitors. For example, Amazon’s Echo device directly connects shoppers at home to their vast online marketplace. These new channels will become less intrusive and present an enormous opportunity for retailers to build a long-standing relationship with the customer. There is clearly an appetite to embrace these sorts of technologies, and only time will tell if Amazon has developed another market-changing concept.”

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