Amazon Go Just Opened in Seattle, Now What?
January 22, 2018 | Contributed by: Greg Sterling
No lines, no checkouts, no registers. That’s the consumer pitch for Amazon Go, which is now open on 7th near Blanchard in downtown Seattle. It was supposed to open to the public in early 2017 but is coming to market roughly a year later, presumably because of some challenges with getting the technology and experience right.
For those who are unaware of the store concept, it uses advanced technology (in-store sensors, computer vision, cameras) to track shoppers and their purchases, allowing people to simply walk out of the store without visiting a cash register. The appeal of this, especially for Millennials and Gen Z, should be obvious. Waiting in checkout lines is one of the most unfortunate parts of the in-store experience — and a big driver of e-commerce during busy holiday shopping periods.
Amazon Go has human employees, just no cashiers. The store itself is like a cross between Whole Foods and 7-11. It offers in-demand brand products and prepared foods in roughly 1,800 square feet.
In order to shop there, consumers need to download the Amazon Go app and have a default credit card set up. Upon entry you scan a QR code. There are cameras and sensors throughout the store that enable Amazon to individually track products and charge your account when you leave. A receipt appears in the app.
While it’s possible that Amazon Go will not succeed, anyone dismissing the initiative (especially anyone in retail) is foolish. This is going to impact the grocery industry, QSR and retail more broadly. There are multiple ways this will manifest:
- Data — inventory and shopper insights: the data that Amazon will get from these stores will be incredibly valuable (and it may be combined with online data at some point).
- Checkout experience: if Amazon rolls out more of these stores it could condition people to shop without expecting to wait in line to check out. That would put significant pressure on other grocery stores and retailers (longer term) to develop line-free or at least more streamlined checkout processes. This is something that all retailers should be thinking about — now.
- Use of advanced technology in stores: there’s a ton of technology in Amazon Go. Most retailers have been experimenting with in-store sensors, beacons, interactive displays and other in-store technologies but haven’t really become serious about utilizing technology to improve the customer experience — yet.
- Cashier jobs: millions of Americans work as cashiers in QSR and retail stores. There are significant employment implications for cashier-free stores.
Retailers, fast-casual restaurants and grocery/convenience stores need to respond to this. More importantly, forget Amazon Go, they need to invest in the “next-generation” in-store experience. Amazon Go is just one example. But it’s going to be very challenging for many retailers to commit to reinventing the store.
Accordingly, some will take a “wait and see” approach to determine how scared they should be of Amazon Go. That misses the point almost entirely.
Amazon Go is an example of something larger: new shopping concepts that will displace or disrupt the mediocre store experiences of today (e-commerce is already doing that). Whether or not Amazon rolls out Go in major markets across the US, retailers and QSR need to see this as a retail crossing of the Rubicon.