Following Amazon's announcement of their grocery retail concept ‘Amazon Go’ last year they have now allegedly appointed UK agents to seek up to 200 UK sites from which to launch. We ask what exactly IS Amazon Go and what impact will it have on the consumer experience?
Amazon first made its entry into the grocery retail market with the launch of their home delivery service ‘Amazon Fresh’ in 2007 in the US, which made it over to this side of the pond in 2016. Currently only available in select central and east London locations (covering 69 postcodes), existing Amazon Prime members can use the grocery delivery service – spanning around 130,000 'fresh' products such as fresh fruit, veggies, meat, and seafood. The current cost is £6.99 per month, with free same-day deliveries (in one hour timeslots) and many of the goods on sale are priced more cheaply than you can buy in the supermarkets. Essentially this Amazon offering competes with the other well-known supermarket home-delivery services such as Sainsbury's, Ocado and ASDA.
A new kind of 'supermarket'
Amazon Go takes the 'Fresh' concept further, with a chain of partially-automated grocery stores. These stores sell prepared foods, meal kits, groceries and alcohol (including named brands, house brands, and local brands). Amazon customers get to buy their Amazon goods in person (rather than online) but rather than having to take them through the cash tills, you simply walk in – pick up what you want – and walk straight out of the shop. It has become known as “Just Walk Out” technology.
Revolutionary retail technology
Several technologies are used throughout the stores, including computer vision (computers gaining high-level understanding from digital images or videos which enables them to automate tasks that the human visual system can do), deep learning algorithms and sensor function (the combining of sensory data derived from disparate sources) to automate much of the purchase, checkout and payment steps associated with a retail transaction.
What does all this mean for customer experience?
Hailed as a revolutionary model, Amazon Go relies on the prevalence of smartphones and geofencing technology (a virtual perimeter for a real-world geographic area) in order to streamline the customer experience. Customers download the Amazon Go app (linked to their Amazon account) before shopping at the store, and this then allows users to add others to their account – so spouses’ and kids’ purchases can be charged to the same bill.
The ceiling of the store has multiple cameras and store shelves have weight sensors, in order to detect which items a customer took. If a customer takes an item off of a shelf, it will be added to their virtual cart. If they put it back on the shelf, it is removed from their virtual cart.
Amazon allegedly plans to open 3,000 Amazon Go stores across the US over the next three years, no doubt with the aim of replicating this in the UK.
Teething problems for Amazon
There have however been issues - the public roll-out of the Seattle Amazon Go prototype location was delayed due to issues with the sensors' ability to track multiple users or objects within the store, such as when children move items to other shelves or when more than one customer has a similar build of body. It also remains to be seen what the effect on shoplifting within the stores is.
The future of UK retail shopping
So will this pioneering enterprise change the face of retail shopping in the UK? Rumour has it that other companies, from start-ups such as AiFi through to giants such as Walmart and Microsoft, are jostling to get into the game.
Cynics argue that Amazon Go will ultimately fail because of one universal psychological truth – that the shopping ‘experience’ (the choosing, the selecting, the browsing) is not the same as simply walking in and buying.
Amazon Go does rely on the consumer walking in, grabbing what they want from the shelf, and walking out. However, since the birth of e-commerce and booming popularity of online shopping we have very set expectations - we are never disappointed with the selection of stock (the world is our oyster), products are rarely out-of-stock, and we do not have to leave the comfort of our homes and actually physically go anywhere. In a way Amazon Go might appear to be a step ‘backwards’ from this – we have the hassle of having to physically go to a store, and we face the disappointment of what we want not being in stock. We then have to physically carry whatever we have bought home with us.
China seems to be solving these issues with its Alibaba’s Hema Supermarket which blends online and offline experiences (more about this to come) and Xenia Retail’s modern ‘Point of Sale’ system. These celebrate shopping for the social activity it has always been, rather than Amazon Go which simply celebrates not having to wait in a queue to pay for what you have bought.
But what does this mean?
Ultimately it seems that retailers will need to ignore the Amazon Go model and instead opt for intuitive solutions that best allow them to celebrate the physicality of a future world, where consumers get a digital experience in an actual physical retail space. The best of both worlds...could we see the rebirth of the high street?
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