It’s all go at AMAZON – are we focusing too much on what they’re doing?

Amazon ditch checkouts

You’re heading to the exit. You have the goods in your bag – ingredients for tonight’s dinner – and you just walk out without paying. Simple and easy. But, you’re not a shoplifter, you’re a law-abiding citizen. As you pass by the beacons at the door (which registered the fact that you came into the store in the first place), your bill is added up in an instant and then charged to your credit card.

Is that the future of retail? The checkout-less store that lets you come and go as you please? It might be. During our Connected Retail Webinar in February, which we ran with research specialists, Planet Retail, a listener asked that question referring to Amazon’s experimental store in Seattle, Amazon Go. It has no checkout, just sensors that authenticate shoppers via their smartphones (i.e. they must have an Amazon account), and camera track their movements. Shoppers also interact with products on the shelves via digital technology.

The theory is simple: shoppers choose what they want, put it in their bags and then leave the store. The bill is instantly settled online. There’s very little human interaction. There have been some teething problems reported, with the technology finding it hard to cope with more than 20 people or so in the store at any one time.[1] Admittedly, the store is in ‘beta mode’ at the time of writing, and you’d expect there to be kinks that need to be ironed out. But, the point is a broader one: with Amazon Go are we seeing something revolutionary here? Is this the future?

It might be, in some sectors. The technology should be both robust and secure. Any retailer is going to be wary of the possibility of high shrinkage rates. Loss prevention must be a priority, obviously. Amazon is living up to its reputation as a retail pioneer. It’s AI device, the Echo, is enabling users to just say out loud what they want, and have it delivered to their door. And the company is also working on a shipping system that uses data analytics to predict what new products you will buy and have it sent to you before you’ve even ordered it! Their patent for the system was filed in 2014[2]

Are we focusing too much on what Amazon is doing?

Perhaps. They know how to set the digital benchmark for mass retail, that’s for sure. But, every retailer is different. There’s no need to blindly copy Amazon (or anyone else for that matter). In fact, I’m not sure that most retailers would contemplate investing in the kind of technology that would be needed to replicate the Amazon Go experience. It’s not certain what the ROI would be. I don’t think it would be worth it for most established retailers. But, the story illustrates my key point: you need to understand what your customers want, and what your organization’s strengths in the market are, and match the technology to outcomes based on that knowledge and insight.

That’s what we strive to help our customers do.

Read the whitepaper based on the Webinar here.

[1] The Guardian 27th March 2017

[2] Thinking Machines Luke Dormehl. WH Allen 2017

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