Industry Analyst & Strategist
If you’re alive and have eyeballs, you are aware of and likely familiar to some degree with Amazon Go. It’s Amazon’s new concept around shopping, billed on its site as “The world’s most advanced shopping technology.”
In short, it’s a store with no checkout experience. Shoppers just grab their items and leave.
As ecommerce continues to grow exponentially (In 2017, online sales of physical goods totaled $446.8 billion in 2017 and should exceed $700 billion in 2022), brick-and-mortar stores face increasing pressure to differentiate in order to compete with more convenient online competitors.
Amazon seems to have grasped this need for differentiation and novelty before everyone else, launching a number of Amazon Go stores around the country. The hook? “No lines, no checkout – just grab and go!”
Admittedly, that sounded great to me. In fact, I decided to check out the store at Ogilvie.
It blew my mind.
Let me explain a little further.
Ease, Effectiveness, and a Creep Factor < 10
As background, you need to download the Amazon Go app before you try the experience. You scan a code to enter the store, simply shop around, grab the product(s) you want, and leave. Seriously. That’s it.
It works via similar technologies used in self-driving cars: sensor fusion, computer vision, and deep learning. All this technology detects when products are taken (and when someone puts something back on the shelf) and tracks them in your virtual cart.
Once you leave the store with your items, your Amazon account is charged and a receipt is sent. The entire process was so seamless, I was amazed. I think the convenience factor outweighs the idea that technology is tracking your every movement.
Future of Commodity Retail
I truly believe that the “grab and go”, technology-fueled, convenient customer experience like the one offered by Amazon Go is the future of commodity retail. The long and short of it is that optimized customer experience is the future of retail. As people beeline to their computers to make more purchases than ever, there is still an opportunity for brick-and-mortar to effectively compete, particularly when it comes to commodities.
While different online services have tried to corner that market (Shipt by Target, PeaPod, InstaCart, Amazon Dash), the reality is that shopping for commodities is different than shopping for, say, a sweater.
People grow attached to different brands, styles, and marketing when it comes to things like apparel retail. But when you’re hungry for an apple, you don’t typically find yourself scanning online sites for the best price point or brand. You go to the nearest store that sells apples and you buy one. In person.
Obviously, the argument can be made that certain people will opt for an organic Honeycrisp apple from Whole Foods, while others are happy grabbing a Red Delicious from the local Jewel. But the fact remains the same: people are walking into those stores to get what they already know they want.
The question for commodity retailers then becomes, how do we make it as easy as possible for people to come in, grab what they already know they want, and leave? Amazon Go answers that question with a startling elegance.
When it comes to commodities, people have a different mentality about shopping that I don’t think is really understood yet. Amazon Go begins to chisel away at the impetus behind that mentality with its ultra-convenient, ultra streamlined shopping experience. It’s a disruptor, which takes time to gain favor with the masses. However, I believe that this is a step in the direction of optimized commodity retail. Of course, only time will tell.
If you want to check it out for yourself, Chicago currently has three locations, with a fourth coming this year:
Go, test it, buy some stuff you need. Then let me know your thoughts!