Innovación: Amazon, Coop and the supermarkets of the future.
Marzo 20, 2017
Two different formats but the same objective: revolutioning the shopping consumer experience through new shopping innovations for Amazon and Coop.
1. Amazon Go
Amazon, announced the launch of its first physical store in Seattle in 2017, Amazon Go, a new innovative convenience store with no checkout and no lines for shoppers. Consumers have just to check in with their Amazon Go app when they want to go in the store and just shopping. Indeed thanks to RFID sensors which can automatically identify when a product is added to the cart shoppers don’t have to do anything else later on. When the shopper leaves the store, Amazon automatically charges the shopping in the smartphone app. This new format generated numerous critics, especially for the risk of cutting human jobs due to this huge automatisation (no cashiers and less vendors). But, are we sure that is not still happening somehow? Of course there is no an existing model such as Amazon Go but, firstly, automatic cashiers are spread out through many retail formats (convenience stores, supermarkets, hypermarkets, etc.) across many countries with the difference that the shopper still has to do some actions to conclude its checkout, by scanning on the automatic cashier all its products. There are also some retailers which are already offering self checkout through their apps. For instance Coop in Italy, thanks to its mobile app Salvatempoenables consumers to quickly shop inside the store. The consumer has to open the app and scanning all products he wants through the QR code. At the same time, thanks to the app, he can also decide to check, to use coupons and to be informed on promotions and to pay to the automatic cashier.
To summarise, Amazon objectives through the Amazon Go are:
- Increase the presence in the grocery business through a more profitable investment. Indeed as happened for many bricks and mortar stores even Amazon with Amazon Fresh faced the issue of the high delivery cost, which can only be reduced by making stores as Amazon go, collection points.
- Increase the distribution and the awareness of its own private labels. Amazon Go will be a way through which Amazon will be able to better test and to expand its grocery private labels, which, will help the retailer to get higher margins vs manufacturers branded products.
- Selling items that shoppers are not buying online. Through Amazon Go, Amazon wants also to sell items (as fresh fruit or vegetables) which consumers are struggling to buy, by making easier the shopping with no checkouts and no lines and by making sure that consumers can physically test the quality of fresh food they want.
- Improve and expand the Amazon Pay service (Forbes, 2016), launched in 2013, by allowing consumers to shop through different websites thanks to their Amazon account. Doing this in its store will avoid issues with other retailers, which have currently struggled to accept a service provided by a direct competitor as payment method in their stores
- Increase the traffic on Amazon.com. By taking advantage of all traffic data coming from the app Amazon will be able to improve and to increase customisation to its users, as it is already doing online on Amazon.com.
2. Coop: the “supermarket of the future”
Coop opened in December 2016 a new format called “supermarket of the future”. The model was already tested at Expo 2015 in Milan and since it is great success, the Italian retailer decided to open its first store located in Bicocca the business district northeast of Milan. The format is a supermarket with a sales area of 1000 sq m. full of fresh food and beverages products and private labels brands. The innovation of the store is especially the presence of 54 interactive monitors able to show to the consumer all information he needs to be more aware of the ingredients of a product, but also on the country of origin, the recycling, on promotions, on similar products or on complementary products. To get all this information the consumer just have to take a product in his hand and he can immediately receive all instructions in a screen in front of him. The store is also equipped with 46 totem-touch spread out the store where the shopper just have to scan the product to get the same information mentioned before. The store also includes the click and collect service (Coop Drive) as well as the restaurant branded “Fior Fiore” the premium private label of the italian retailer (E-Coop, 2016).
The Coop objectives through the supermarket of the future are basically:
- Enhance and increase the shopping experience by allowing consumers to get access on all information (that he can alternatively find out only on the Internet) on products he wants to purchase.
- Increase the awareness of its own private labels: Coop, as other retailers, has the goal of increasing the private labels business in coming years and the supermarket of the future is a great way to do that through monitors and totems showing transparent information on the quality of these products by also proposing alternative solutions (probably other private labels)
3. Two different stores designed for future consumers
Both stores have the goal to improve the consumers shopping experience, although through a different way.
Amazon wants to address its first physical stores to urban innovative consumers whose main goal is to save time by avoiding checkouts and queues. They are young and adults (between 18 -50), Amazon users, studying or working most of the day and with few time to spend in a store and loving a proposal which can make more efficient their daily time. Concerning the technology the American retailer innovation is focused on mobile, where all info are contained and the store works.
Concerning the location, the convenience store is perfect for urban and center areas of big cities, as Seattle. The test will be made in USA, the main market for Amazon, where the digitalisation is higher than any other country worldwide and where shoppers, since the high e-commerce penetration, are used not to always have a human contact when they are shopping.
The situation is the opposite for Coop in Italy. Regarding the location, the difference is firstly the urban area. The supermarket selling area requires a bigger area that it is complicated to find in the city center. For this reason Coop chose a periphery that, however, it is full of students and professionals (since one of the biggest Milan universities and many companies are located there). Concerning the technology, the one chose by Coop is a different story vs Amazon. Firstly the technology is not embedded in any shopper device and it can work automatically. The goal of Coop through this new store it is not using the technology to save the time of shoppers but it is to make shoppers more informed since they are increasingly demanding for more information and instructions on what they are consuming. This new format is not only for young and professionals with high education and with a high digitalisation (despite the location) but it is, basically, for all generations, which can also decide to avoid the usage of the store technology when they are shopping.
Table 1: Amazon model vs Coop model
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