Imagine being able to walk into a retail space over your limited lunch hour, selecting a handful of items you need to make dinner that night, and immediately leaving the store without having to wait in line to checkout and pay. While such a scenario may have seemed like a dream just a few years ago, it is quickly becoming a reality for today’s time-crunched shoppers. Amazon Go is poised to capitalize on recent trends in consumer demand by allowing cashier-less shopping, which could result in sizable growth (and profits) for its parent company.
What is Amazon Go?
Amazon Go is the first “Just Walk Out Shopping” experience introduced to the public in 2018 by Amazon. The concept, developed and tested by a team of Amazon executives, is based on the idea of a convenience store designed to allow customers to conduct their shopping while never having to checkout.
To get started, shoppers open an Amazon account and download the Amazon Go app on their smartphone. As shoppers enter the Amazon Go store, they are prompted to scan the app on a turnstile. Then, they can put their phones away and commence shopping. Amazon Go relies on its patented technologies to provide a hassle-free, checkout-free experience for shoppers.
The technologies used by the Amazon Go app are “the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning. Just Walk Out Technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you’re done shopping, you can just leave the store.” After shoppers visit the store, Amazon Go sends a charge to their account, along with a receipt for the items they left with.
Amazon Go is designed to accommodate a variety of situations encountered by consumers when they shop, including the family shopping experience. One of the most common questions consumers ask is how they can shop if not all of their family members – specifically, children – have the Amazon Go app. In this case, the shopper with the app can scan each family member as they enter the store through the turnstile; then, they are free to shop. Their final purchases will be billed to the primary user.
Amazon recently introduced Amazon Go Grocery. Amazon Go Grocery has transformed the concept of Amazon Go from a convenience store to a supermarket, offering “everything you’d want from a neighborhood grocery store – from fresh produce and meat and seafood to bakery items and household essentials – plus easy-to-make dinner options.”
RBC analyst Mark Mahaney reports: “Amazon Go stores could be a game changer for [the] physical retail experience.” He continues, “[It’s] almost like the experience of shoplifting, except it’s legal, and you don’t need to hide the stuff in your jacket. … In-store technology enables shoppers to have a very efficient and pleasant shopping experience. … The overall opportunity is huge.”
Amazon Go: Paving a New Future
Amazon Go has not only created a new opportunity for consumers but has also branded itself as one of the most formidable competitors in the retail industry. Its new technology has created a barrier for other retailers, which may be challenging to overcome without Just Walk Out technology.
For experienced shoppers, Amazon Go is revolutionary. Imagine trying to choose between marinara and alfredo sauce for tonight’s pasta dinner. You pick up both, trying to decide which one to buy. Now, you can choose one over the other and just walk out of the store, knowing that Amazon Go will charge you only for what you left with and not for what you picked up to look at before returning it to the shelf. You do not have to deal with any lines, registers, or cashiers. It might feel like you’re getting away with something.
Indeed, it might remind you of removing an item from the hotel minibar. You ask yourself whether you have actually been charged for the item just by lifting it out of its spot in the cabinet. There is a definite feeling that you could be stealing by “just walking out” with it. Is security going to come and stop you? Are you going to be overcharged for the item? Are you going to be undercharged? Amazon Go technology ensures that you pay only for the items you leave with. Such experiences have the potential to change the retail landscape forever.
Technology Is Reducing the Demand for Retail Staff
One of the most notable benefits Amazon Go has introduced is the ability to reduce the number of staff required for business operations.
Staff is one of the costliest expenses in the retail sector. Training, high turnover rates, and high demand during peak times can create financial challenges for business owners. However, technology has helped reduce staff expenses over the past few years. Initially, the introduction of self-checkout solutions removed the need for cashiers. Systems, including Ombori Grid, utilize hardware that can be integrated with a business’s existing technology. With quick deployment and simple integration, retailers can now remove their cashier checkout stands and reduce the number of staff needed to manage the checkout process and troubleshoot the self-checkout kiosks.
Amazon Go has taken this one step further by removing the checkout process altogether. Its technology allows customers to skip the line and expedite their shopping experience. One Amazon Go shopper reports: “[It’s] so quick!!! I’m in and out in 27 seconds flat – with breakfast.” In no other shopping environment can a consumer experience this type of expedited checkout process. And no human assistance is needed!
How Can Retailers Compete with Amazon Go?
To compete with Amazon, retailers must rely on new technologies to improve the overall customer experience. Although businesses may not offer Just Walk Out Technology, they have other options available to them in the market. Ombori Grid, for example, offers retailers an array of solutions that have been shown to improve the customer experience while streamlining business operations and improving financial returns.
Retailers may not be able to eliminate the process of checking out, but they can improve the experience for customers. Using queue management systems, businesses can reduce, if not remove, wait time in lines. Customers can wait in a virtual line, allowing them to resume shopping when it is their turn. They can check-in online or use a QR code. Once it is their turn, they are notified via SMS or text message.
Interactive Digital Signage
Not every shopping experience can be expedited. In those cases, consumer expectations shift to what the shopping experience provides instead of how quickly they can get in and out of the store. To meet consumer demands, retailers can turn to interactive digital signage to provide a memorable and productive experience. This technology includes signs that help consumers identify where items are located or kiosks that help shoppers identify items that match what they are looking for.
For example, Ombori Store Assistant offers Guided Shopping. “With the ‘Guided Shopping’ feature of the Ombori Store Assistant, the natural language voice interface is friendly and conversational. By guiding the customer through a series of questions, [the system can provide] product recommendations [that are] more and more adapted to what the customer is looking for. For example, it can provide smart recommendations for skincare, alcohol (gin, whisky), perfume and fragrance, gifts (for him, her, and [the] kids), but it can easily be adapted for additional use-cases. … The Store Assistant can be further enhanced with add-on modules to take payments both online and using a card reader at the screen or [with] turn-by-turn directions so customers can quickly locate items within a store.”
During the COVID-19 pandemic, shoppers became more aware of the number of individuals around them. To reduce the risk of contracting the virus, they started to practice social distancing. In response, retailers supported and encouraged safe distancing within their stores. This consumer behavior, although not as significant as it was at the beginning of the pandemic, is expected to remain popular in a post-pandemic world.
Retailers who want to be mindful of this change can rely on occupancy control systems such as Ombori Occupancy Control. Occupancy control solutions leverage technology to count the number of patrons who enter and exit a store. Retailers can then ensure that their stores are managing maximum occupancy and providing a safe environment for shoppers.
BOPIS and BOPAC
BOPIS, or “buy online, pick up in-store,” and BOPAC, or “buy online, pick up at curbside,” allow consumers to purchase items online and pick them up the same day, thus avoiding the hassle of going into the store and waiting in line. This type of technology has drastically increased in popularity during the pandemic, and now consumers are accustomed to quick pick-up service. For some, BOPIS and BOPAC are more convenient than Amazon Go since they remove the need for customers to enter the store.
Amazon is an innovator in the retail industry. What started as a bookstore in the 1990s has grown into the most dominant brand in the world. However, retailers should not be intimidated by Amazon’s success. Instead, they should rely on current innovations to improve their platforms and understand that the technology behind Amazon Go will one day be available to them if consumer demand continues to rise.
Rui is COO of Ombori Grid. Before joining Ombori in 2017, he worked in Beijing, Tokyo, Silicon Valley and Zagreb before ending up in Stockholm. He previously spent nine years in R&D at Ericsson as Operative Product Owner, and is a highly skilled leader in IT and communications with a successful track record of working closely with both stakeholders and management.