Amazon Go, by CJ Rosenbaum from the AmazonSellersLawyer.com. Amazon Sellers Lawyer is a legal team that is dedicated to defending sellers’ rights by applying legal strategies to protect their accounts and handle account suspensions, complaints and policy violations. All opinions expressed in this article are those of the guest author only.
In case you assumed the future of shopping was online, a brand new potentially groundbreaking physical grocery store just popped up on the corner of 7th Avenue and Blanchard Street in Seattle.
Opening in early 2017, Amazon Go is omnichannel selling at its finest–offering the experience and gratifying immediacy of a brick and mortar, minus headaches such as long checkout lines.
Amazon Go is poised to shake up the grocery industry and garner a whole set of new loyal shoppers. Here’s everything you need to know.
How Does Amazon Go Work?
It’s just like shopping at your usual neighborhood grocery store, except you don’t have to check out at all.
In that sense, “Amazon Go” is a fitting name–this could cut a lot of time out of a grocery shopping trip. Customers need three things to get started:
- An Amazon account
- A supported smartphone
- The free Amazon Go app
Interestingly, this isn’t gated to just Prime members–it’s a whole other program open to another set of shoppers who may not even shop on Amazon.
Shoppers simply use the Amazon Go app on their supported smartphone to enter the store, and the store entrance sensors instantly recognizes them.
Shoppers are then free to then browse the store (which doesn’t look much different than your typical grocery store) and grab what they need.
Every item they pick up is recognized by the following technology:
- Advanced machine learning
- Computer Vision
If a shopper places an item in their cart, the above technology knows, and they add that to their balance. If the shopper changes their mind and places the item back on the shelf, the advanced technology recognizes that too, and deducts that charge from the balance.
(No word on how this technology will cope with shoppers who have a habit of leaving cheese in the meat aisle or bread in the cereal aisle.)
When shoppers are ready to leave, they don’t have to fight to find the shortest line–they truly get to go, and the balance is finalized and deducted from their Amazon Go account on departure.
At least in the beginning, it’s likely Amazon Go will employ helpers to guide confused shoppers along their way, or help them find the aisle they need.
It may take shoppers some time to catch on to this new grocery store model–but hey, so did online shopping.
Who’s Amazon Go’s Target Audience?
Why doesn’t Amazon Fresh fulfill the need for fresh groceries?
Well, it could be that not all grocery shoppers aren’t all sold on the concept, mainly because–well, they actually enjoy the weekly shopping trip.
A Nielson survey of 30,000 shoppers in 60 countries showed while more than half are open to grocery shopping online, there are still “61% [of shoppers who still believe] going to the grocery store is an enjoyable and engaging experience.”
This makes sense because most people don’t purchase food in the same way they purchase other household items or other common online purchases.
Food is more of a tangible experience, and there are opportunities to pick the best bunch of bananas, the ripest apples, and the freshest lettuce. It’s also an opportunity to discover new foods to enjoy–and many sellers rely on that last-minute impulse buy in the checkout line that’s not as apparent during an online shopping trip.
The additional benefit to shopping in store as opposed to shopping on Amazon Fresh is immediate gratification.
Shoppers can now whip up those last minute meals for a surprise visit from the in-laws, or satiate a craving for potato chips, without waiting hours for the delivery person to show up.
Amazon’s also tapping into a relatively new market of shoppers who love the convenience of meal kits such as BlueApron. It’s rumored that meal kit industry delivery service startups have raised more than $650 million in venture capital.
Chef-created Amazon Meal Kits that take just 30 minutes to make, and they’re available at Amazon Go stores. No subscription required, either, which may be one of the biggest reasons some data shows 90% of customers ditch meal kits by the six-month mark.
Will Amazon Go Succeed?
All signs point to yes–particularly because Amazon is entirely removing the pain of making a purchase.
Studies have shown that paying in cash can be painful; cards less so. Imagine handing over… nothing. As one Redditor points out, this could eliminate a lot of the pain of purchasing:
This elimination of purchase pain (i.e. card or cash) could actually result in even more purchases.
Amazon’s implementation of 1-Click Payment on their original app shows that they are in tune with the way their customers buy, and there may be a correlation between 1-Click shoppers and a higher average order value.
How Can Amazon Sellers Get Their Products on Amazon Go Shelves?
Although we aren’t sure the process sellers will have to take if they want to put their products on Amazon Go shelves, we do know it will likely be restricted to vendors at the beginning.
Here’s what the Amazon Go site says:
“You’ll find well-known brands we love, plus special finds we’re excited to introduce to customers.”
With the success of Amazon’s brands–including AmazonBasics and seven recent fashion brands launched in February–we can assume that some of those special brands will be Amazon’s own.
According to TechCrunch, these private labeled Amazon brands are absolutely performing well–and in some cases, becoming the highest sellers in particular categories:
“[The] AmazonBasics brand, for example, now accounts for around one-third of online battery sales and is seeing 93 percent year-over-year growth.”
Amazon Go: The Bottom Line
Amazon Go has it all–the immediacy of a brick-and-mortar, a seamless customer experience, a carefully curated selection of products, and a painless purchase experience. Traditional grocery stores will be hard-pressed to compete if Amazon expands Go beyond Seattle.
Amazon may now be a massive company, but they still have an incredible ability to pinpoint exactly what customers need and pivot to fit that preference.
And at the core, that’s still their biggest advantage over traditional grocery stores or retailers.
At the end of the day, Amazon Go is just another example of Amazon’s ingenuity and self-reported customer obsession–and we anticipate 2017 will be the start of another industry altered forever by technology–in a good way.