Blog Post - Hugh Fletcher, Feb 19 2019

Is "Amazon Go" shop-lifting gone legit?

Is "Amazon Go" shop-lifting gone legit?

The point of payment in a consumer transaction is often described as "friction." Whether online or off, it's often at this moment that the customer might have second thoughts. Alternatively, there could be any number of barriers to payment, from a lack of cash, to a website checkout process that is too long and involved. So, the quest to remove this friction is ongoing where retailers are concerned.

Uber is seen as the first mainstream example of successful frictionless transaction, where payment for taxi services is taken directly from the customer's card without any traditional exchange style interaction. It's super slick, and still without peer for those of us who continue to use it regularly. So, what's the next step in the process, and how can this be made to work for retail stores?

Amazon Go

Just over a year ago, Amazon ventured into the world of frictionless retail with the first checkout-free high street store, Amazon Go. The Amazon Go store works on the basis of cameras and sensors that are designed to keep track of what customers pick up off the shelves. Customers have a virtual cart made up of items that they have selected - when an item is returned to the shelf in real life, it is also removed from the virtual cart. Just as with the Uber set up, there is a smart phone app that must be scanned when customers pass through a gated turnstile. The app has already been pre-loaded with credit card details before customers start to shop.

Is Amazon Go legalised shop-lifting?

It is and it isn't. Obviously there's no actual theft taking place, as customers are paying for what they take out of the store. At the same time, it may feel like the item is free because the friction of the actual payment has been removed.

The key difference is the turnstiles - as soon as a consumer passes through these with an item, the system of sensors will record the purchase and charge the account. However, it's interesting to note that there are multiple YouTube videos of people claiming to be "stealing" from the store, which indicates that the technology may not yet be perfect.

The future of frictionless shopping

The fact that the store exists is an acknowledgement that consumers don't really like paying for items - it's the necessary evil of the shopping experience even when the customer can afford it. Although Amazon has yet to announce whether any more locations will be added to the original store, it's highly likely that the trend for frictionless shopping is set to grow at pace.

We have seen self-checkout evolve into no checkout and it's not just Amazon tapping into the trend. Walmart, for example, has been using its "scan and go" payment set up - where customers scan bar codes and pay with an app - for many years.

Amazon is a pioneering and innovative retail giant that tends to lead the way when it comes to retail technology. However, what's certain is that this need to find new ways for frictionless retail for today's shoppers is going to be more widespread than just the big retail behemoths - pretty soon, it will be everywhere.

Friction-free payment is one of several key trends highlighted by Wunderman Commerce in our new report, Wunderman Commerce Futures 2019, set to have a significant impact on commerce - and which present organisations a great opportunity to move ahead in a digital-first world. You can download the full report with our compliments.

Download our Futures 2019 report