How Amazon Go changes the customer experience
The public launch of Amazon Go Monday represents a slew of technology advancements and customer experience innovation as the Seattle-based supermarket, boasting a cashierless checkout, is delivering on a range of customer wants and needs.
That’s the feedback from industry watchers, who are using descriptors such as revolutionary, nimbleness and innovative to describe the consumer experience at Amazon Go, which launched in beta in December 2016, boasting a no-check experience in grocery shopping.
The store was initially slated to open to the public in March 2017, but hit some glitches, as The Wall Street Journal reported, as its sensor-based tracking system seemed to have difficulty tracking items as two dozen shoppers browsed aisles.
By November, however, news reports indicated that the glitches were under control, and Amazon was reported to be gearing up to launch more Go stores, which also use cameras and deep-learning technology to track items put into shopper’s bags via a virtual cart at the 1,800-square-foot store.
To shop at Amazon Go, consumers need an Amazon account, a credit card and the Go app, which is available in the Apple App Store, Google Play, and Amazon Appstore. Shoppers launch the app as they head into the store.
The proprietary technology, which Amazon calls “Just Walk Out Shopping,” tracks items as they’re taken off shelves and when they’re returned to shelves. Once a shopper leaves the store the shopping bag/virtual cart is totaled up and the shopper’s credit card is charged for the items. The consumer receives an email receipt after the virtual checkout.
The cashierless, no check-out line experience, according to Amazon, is about pushing the “boundaries of computer vision and machine learning to create a store where customers could simply take what they want and go.” It’s just one of many reasons Amazon was designated retail influencer of 2017 by Retail Customer Experience in late 2017.
What the experts think
Industry watchers think Amazon has done both and, at the same time, hit hard at what consumers want today — convenience and a seamless retail buying experience. One believes it even represents the future of brick-and-mortar commerce.
“We’ve been hearing about the ‘future of retail’ for years, but it’s now here,” Casey Gannon, vice president of marketing at Shopgate, told Retail Customer Experience in an email.
“The future has arrived, and the shift is going to be focused around convenience, simplicity and enjoyability. These factors build brand loyalty to keep customers coming back again and again. The future is about using technology to craft remarkable brand experiences. Amazon Go’s use of mobile technology to respond to the demands of consumers will set the tone for other retailers to follow.”
The Amazon Go store is being described as a high-end convenience store and even Amazon acknowledges it’s not striving to be a full-fledged supermarket such as Whole Foods, which it acquired in 2017.
The store offers ready-to-eat breakfast, lunch, dinner, and snack options made by company chefs and local kitchens and bakeries, and the beta testing proved its line of home-cooked Meal Kits are a popular item. The store isn’t completely unmanned as there are employees in the liquor aisles to determine age verification and there are associates stocking shelves and available for product recommendation.
In replacing the cashier with technology Amazon has done what it did when it revolutionized digital commerce — now it’s just planting it in the brick-and-mortar environment, according to Terry Hunter, managing director, U.K., at Astound Commerce.
“The checkout-less Amazon Go supermarket has reinvented the traditional retail store, integrating digital technology in order to achieve a similar level of convenience as shoppers have grown accustomed to online,” he said in an email interview. “Many pure play online retailers are now making efforts to create in-store experiences to further grow their brands. By creating this in-store experience, Amazon has added tangibility to its grocery offering which did not exist before.”
Why competitors may not take the same path too soon
Yet Hunter, and one other industry watcher, aren’t convinced other supermarkets will run down the same innovation aisle.
“In the short term, this is unlikely,” Hunter said.Amazon’s market-leading position and online businesses will provide a financial cushion to support its push into physical retail. The new approach will also take some getting used to by shoppers: the camera identification and tracking technology in use in the store has experienced teething problems, and many consumers will likely see the move as a surveillance step too far.”
He acknowledged, however, that Amazon’s approach is dissolving an obstacle that often stops shoppers from going into a store — a long check-out line — and that will likely drive Amazon Go store traffic and consumer loyalty.
“Not having to queue and being able to make purchases quickly will draw consumers to the Seattle store, with the frictionless experience which Amazon is already known for. Most importantly, though, is the link the company has established between online and physical retail, with items automatically charged to shoppers’ Amazon accounts,” he said.
Both Hunter and Tushar Patel, chief marketing officer at Kibo, an omnichannel commerce software provider, believe not many other supermarket brands, or even retailers, are in a position to eliminate the checkout line likely due to the technology investment required.
“According to our research, 94 percent of consumers expect the online and in-store experience to be one connected experience. While other retailers may not be ready to offer their consumers a checkout-free experience at this time, savvy retailers can effectively compete against this offering by continuing to connect their digital and physical components and create opportunities for multiple fulfillment offers as well as mobile coupons while shopping in-store,” Patel said in an email interview.
Amazon Go is more than just about convenience
While cashierless checkout is clearly something consumers, especially millennials, will embrace, the innovation represents much more than just a faster food shopping experience.
Avionos Co-Founder and Principal Dan Neiweem said it illustrates how fast companies are moving to engage with the “evolving” customer.
“By launching their reimagined grocery store, Amazon is using their test-and-learn philosophy to gauge how open customers are to this concept and refine the service based on shopper feedback and preferences,” he said in an email interview, describing Amazon Go as another example of “Amazon’s ability to be nimble in trying new things — their iterative, test-and-learn approach has been a large part of their success in the past.”
In fact, he said Amazon Go isn’t a completely new concept for Amazon given all its experimentation with voice assistant technology (Alexa) and its growing Amazon Echo device portfolio.
“This move also continues to expand on their efforts to iterate and find ways to effectively combine the in-store and digital experiences,” he said, adding Amazon Go is an example that “shows brands and retailers just how important it is to be able to move quickly and provide new ways to meet evolving customer demands and preferences, rather than trying to catch up to them.”
Juan Jose Lopez Murphy, artificial intelligence and data science practice lead at Globant, noted that while Amazon Go is clearly a new innovation it’s not fully baked.
“I believe we shouldn’t expect the store or app to be a final product, but rather consider it to be a minimum viable product. Amazon has invested a great amount of time and research to perfect the experience based on consumer behavior but exposing it to the general clientele over a consistent period of time is the only way to fully understand how customers will behave. Amazon will have to iterate accordingly as small behavioral nuances shake out in store and on the app,” he told Retail Customer Experience in an email interview.
But being first to market will clearly win Amazon some new customers and drive stronger customer loyalty.
“If consumers perceive that a retailer offers better convenience and speed, they will choose to shop there, and they’ll stay loyal because the feeling of customer-centricity and experience is strong,” said Murphy.
The innovation will also likely spur competitors into faster action and reaction, said Jeff Scott, CEO at Infinite Peripherals.
“In the wake of Amazon’s push in to physical stores, many other e-commerce companies, such as Alibaba and Square, are similarly looking to expand their presence into brick-and-mortar. What all these companies have in common is that they’re incorporating elements that are elevating the customer’s in-store experience and encouraging them to come into stores instead of just shopping online,” he told Retail Customer Experience in an email.
“This includes everything from virtual dressing rooms, to mobile point of sale and endless aisle solutions that allow customers to conveniently check out from anywhere in the store, buy items online and pick up in store, and purchase items to be shipped directly to their home.”
Yet while industry watchers are all positive on Amazon Go, the e-commerce leader isn’t without some weak spots, as Retail Customer Experience reported in early January.
A prime one is the reality that competitors, including Target, Lowe’s, Walmart, Neiman Marcus, Wayfair and even small mom-and-pop retailers, are very busy not only catching up, but in some instances, beating Amazon when it comes to innovative technologies enhancing the customer experience.
Walmart is testing the use of employee driven home product delivery, possibly investing in facial recognition to detect shopper moods and reportedly tapping text to provide a new personalized shopping experience for the wealthy busy New York City mom
“Its [Amazon’s] sweet spot is their reliance on technology; their Achilles heel is their reliance on technology,” noted Chip Bell, a Retail Customer Experience blogger.