Innovación: Amazon Go doesn’t mean the end of grocery retail as we know it

We all read last week’s headlines on Amazon Go, grocery retailers initially with dread, and customers with glee.

It was a typical Amazon play……. Yes, a store with No Checkouts.

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Scan from a smartphone app as you enter the store, pick up the items you want while shopping, walk out the store and Amazon will bill everything to your registered Amazon account. Simple, so simple…

This is the first real life realisation of what everyone has been thinking for years as the store of the future.

This is huge. Amazon appears able to single handily revolutionising retail, such that everyone in the market is looking closely at this, with anticipation on figuring out if it works. Amazon is providing the level of service that all retailers would dream to provide to their customers, so they should be afraid.

But will this work for all others? My view is that it won’t. This makes perfect sense for Amazon, in a concept store, on a small scale. If you go over all the information available, you will read about “same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning” – this means cameras, sensors, servers. This obviously makes it expensive and complex to deploy and run, and seemingly easy to fall over.

Anyone working retail tech will tell you that in a store everything changes over night, and keeping track were every bit relevant to this operation is, if all shelfs are loaded properly, if all cameras are properly aligned, all sensor operating as expecting without anything blocking then, will be a nightmare in terms of effort and costs.

Surely this works for Amazon. This is a concept store, and most importantly a convenience store, aimed mostly at the quick meal. You won’t see laundry detergents, packed meat, cleaning products or toilet paper. This means small assortment, high margins, where high shrinkage is expected. Will Amazon be willing to accept a higher than usual rate of theft or error induced shrinkage? Sure, but will it be overly compensated by the experience provided, and the buzz generated.

You will not see people buying big baskets, nor buying anything else than snacks and beverages.

Ask yourself:

– Will Mrs Miggins, the nice old lady next door, be able to use her phone to shop in an all-digital store, with no checkout operators?

– What would happen if you hug a girlfriend going in, wouldn’t that mess with the customer tracking algorithm and prevent you for checking out?

– What would happen if you took the back item from the shelf, instead of the front one, or leave it back at a different location of the store? Would you still pay for it?

For Amazon this makes perfect sense. And is another piece of the jigsaw to dominate retail. All the bulky, commodity grocery shopping gets delivered to your door, Amazon Fresh delivers all the fresh produces to your home or office, and you use Amazon Go to grab you lunch meal at a store by the office.

Would Walmart rollout a similar system to hundreds of their stores, and support the high costs on investment and maintenance? I don’t think so.

The solution for ordinary, Amazon fearing, physical retailers needs to also address the experience, but mostly work for their environment and operation. At least, for the years to come you will still find checkout operators to serve Mrs Miggins, accept cash, help you with the odd events normal to a larger supermarket, or to simply help you make your decision. They will not be able to cope with the high costs of running an Amazon Go like system, nor to endure the high shrinkage that would come out of it.

For these markets the solution needs to be different, but must readily available in order to respond to Amazon Go’s threat. Needs to be cost effective, easy and quick to deploy and maintain, but provide a similar checkout experience, and enhanced engagement to customers.

I must confess I’m biased, but the solution is readily available to all retailers today, and is called YouBeep. Some retailers around the world are experimenting with it, customers are enjoying using it, and everyone is happy. Quicker than waiting for Amazon GO, customers can be enjoying YouBeep at newly adopting stores.

Check the Infographic below that shows what benefits YouBeep brings to the market place.

Fuente: Linkedin


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