Amazon Go debuted the first checkout-less store – Retail Innovations Number Two

Photo Credit JJ Merelo

Amazon debuted the first Amazon Go store last Monday, but does it live up to expectations? reaching second place in our digital retail innovations Amazon continued to streamline the retail experience to make shopping and buying goods ever easier. In another step towards an effortless shopping experience, Amazon Go treats consumers to their first taste of Amazon’s “Just Walk Out Shopping” approach where customers do just that; pick what they want and walk out of the store.

Despite 100’s of cameras and a row of underground style gates at the entrance, it seems Amazon Go is still going through some teething problems, a journalist reviewing the new checkout-less supermarket realised she accidentally shoplifted.

The technology behind the retail giant’s innovation is the same used in self-driving cars. From the cradle of the current technological revolution, Silicone Valley, deep-learning, computer vision, and sensor fusion technologies have been implanted into Amazon’s future-thinking version of the everyday convenience store.

How will this innovative approach impact the UK’s food and drink retail sector?

Breaking the Big 4?

Amazon Go is yet to launch in the UK or Ireland, but with trademark applications at the UK Intellectual Property Office having already been approved, it’s a question of when rather than if.

The retail opportunities behind Amazon Go are huge. With Amazon Go there is no need to pay a cashier. Instead, customers use their mobile phones connected to their Amazon accounts to buzz in and out of the store, meaning there is no need to queue and therefore no time wasted. There is no need to carry money or a bank card, as bills are sent via through the customer’s Amazon account.

In the UK, the food and drink retail sector is a notoriously hard nut to crack, with the so-called Big Four food and drink retailers – Tesco, Sainsbury’s, Asda, and Morrison’s – combined enjoying more than two-thirds of the food and drink market.

Considering the strength of this retail area and the difficulty in breaking into it, could Amazon Go make a sizable dent and open up this market to further competition?

Driving Down Costs

Innovative technology and the mechanisation of the workplace reduce the need for human labour. This is nothing new to supermarket retail. Self-checkouts, introduced just over 10 years ago, are now part of any shopping experience and have successfully reduced labour costs for retailers. Amazon Go simply takes this this further.

Front end costs for Amazon Go, which rank among the highest costs for most supermarkets, are drastically reduced; with no checkouts, there is no need for a checkout staff.

Cost-cutting like this is what allows Amazon to pour money into research to improve the customer experience in their stores.

Simplification

But perhaps cost cutting isn’t the only advantage. Amazon Go could removes the long waits that customers of traditional brick-and-mortar supermarkets face, at a time when 70% of UK consumers have less time for shopping than ever. Amazon’s innovative new supermarket also offers an incredible level of convenience to customers, at a time when 55% of UK consumers say that convenience is the most important factor in choosing where to shop, according to Webloyalty’s The Unfaithful Consumer report.

Added to this is the far greater ‘throughput’ – the flow of people entering and exiting the store – than is possible when checkouts are necessary, driving up possible revenue.

From every angle, Amazon innovation inspires convenience for the consumer while improving the company’s revenue.

Not Just Millennials

While e-commerce and online shopping is most strongly associated with millennials, young people are no longer the only consumer group demanding more from retailers.

Webloyalty’s 5Ps of Shopper Motivation report found that 18% of 35 – 44 year olds and 15% of 45 – 54 year olds were most likely to shop in a particular retailer due to the personalisation of experience it offered. The nature of Amazon Go, connected as it is to personal Amazon accounts, can further this personalization to offer discounts, recommendations, and promotions for everyday shopping.

These sizable age groups are further proof that e-commerce is no longer solely a young person’s game and that understanding consumer behaviour pays dividends for any business.

Digital Retail Innovations Report

Take a look at the other 49 top innovations from the UK & Ireland in The Retail Insider Digital Retail Innovations reportit highlights some of the most interesting technological developments which are taking place in the retail sector.

Webloyaltys retail innovations report

2018-01-24T15:30:19+00:00 24th January 2018|Digital Retail Innovation|