Thursday, 8 December 2016

Is Amazon Go the future of grocery shopping?

When the pioneer of online retailing tests a new store concept, the world of retailing pays attention. Amazon Go is the prototype unit of a US chain of small grocery stores, intended to serve shoppers who want a quick and convenient place to buy frequently-purchased items like milk or freshly-made sandwiches.

What makes this a unique concept is -- as shown above in a still from Amazon's video introduction -- shoppers don't queue to pay at the till. No, seriously, their purchases are tallied on a smartphone app and recorded as they leave the store. Amazon charges the payment method on file for each customer and sends an electronic receipt.

Obviously, only shoppers with smartphones can shop at Amazon Go. But given the mature nature of the smartphone market, this is not much of a barrier. And given the high brand awareness that Amazon enjoys, consumers are likely to at least give this store a go if one opens nearby. Because, it seems, there are some products that simply can't be sold online and some shoppers who simply won't buy groceries online (consumer behaviour in action).

Behind the scenes is Amazon's technology, sensing when a product is lifted from a shelf (and if the product is returned to a shelf). Amazon is a master of inventory management, and with time it will learn what sells and doesn't sell in each store location. No cashiers, an enormous cost savings. And the opportunity to serve the same shopper again and again because groceries are a frequently-purchased product category. Is this the future of grocery shopping?