Amazon opened its first Amazon Go store in Seattle, and it is already causing quite a stir. Some people are excited about this new technology and what it could mean for the retail industry, while others are worried about the impact it will have on jobs.
The implications of this are huge, both for Amazon and the retail industry as a whole. While it is still in its early stages, there are pros and cons to this technology that we will explore in this article...
So, what is Amazon Go, how does it work, and what could its future hold?
What is Amazon Go?
Amazon Go is a retail store that uses new technology to allow customers to purchase items without having to go through a checkout process.
On February 25, 2020, Amazon opened the first Amazon Go Grocery store in Seattle's Capitol Hill neighbourhood in Washington. The store was met with mixed reactions but since then, Amazon Go convenience stores have popped up across the UK and US, with a total of 28 convenience stores as of March 2021.
How does Amazon Go work?
To use Amazon Go, customers must download the Amazon Go app and create an account. Then, they simply scan their phones at the entrance of the store and begin shopping.
The store is equipped with 'just walk-out technology' - sensors and cameras that track the items that each customer picks up (and puts down again). Once they are done shopping, they simply walk out of the store and their receipt will be emailed to them.
There is no need to go through a checkout line or scan items as they leave and the bill is automatically charged to their Amazon account.
This checkout-free solution has the potential to revolutionise shopping experiences and has certainly caused a stir amongst retail employees and those who are worried about the impact this could have on jobs.
How could this technology replace supermarket checkouts?
The potential for Amazon Go to replace traditional supermarket checkouts is huge.
This new technology has the potential to completely change the retail industry as we know it. It's already making waves in convenience stores, where the technology has predominantly been trialled, and it's set to disrupt the mass market, too.
This would mean huge changes for supermarkets... Not only would it eliminate the need for checkout staff, but it could also reduce labour costs and improve efficiency.
And what about retail?
The retail industry is changing and we are seeing more and more retail stores shut down every year. We simultaneously see Amazon open new retail stores to meet the demand for their products; it would seem they are sweeping up the market by staying one step ahead of industry trends and consumer demands.
With Forbes stating that "Amazon Go is already the greatest retail innovation of the next 30 years", it's certainly disrupting the market!
Amazon Go technology succeeds in removing the last ounce of friction in the physical buying process; the checkout system!
No-one wants to stand in line for 10 minutes, load, unload and load their trolley or basket - time is precious - meaning Amazon Go meets every last request of the time-poor modern-day consumer.
The pros and cons of Amazon Store Technology
- No checkout required: As we mentioned earlier, there is no need to go through a checkout line or scan items as you leave the store. This can save customers time and hassle.
- Automatic billing and receipt: Your receipt will be emailed to you automatically, so you don't have to worry about losing it or forgetting to bring it with you for a return.
- You can shop quickly and easily: Contactless payments via phone are a thing of the past - there's no need to even pull your phone out of your pocket!
- Security: there's no way of sneakily hiding a chocolate bar in your trousers or a bottle in your pocket - trust us, we've tried it! - The Amazon Go tracking system monitors every movement and item that's picked up, eliminating theft.
The Cons of Amazon Go
- You need an Amazon account: In order to use Amazon Go, you must have an Amazon account - not a drastic negative, but you'll need to set one up if you don't have one already.
- You need the Amazon Go app: Free up a little storage on your phone to download the app that's required in order to enter the store.
- Not all products are available for purchase via Amazon Go: Some items, like alcohol and cigarettes, are not available for purchase through the store's technology, they still need human verification, for now! We're sure they will implement some form of pre-identification within the app in the future.
The Future of Amazon Go
Whilst it is still in its early stages, it's clear that we can expect to see more Amazon Go stores popping up in the near future as the retail giant looks to expand its reach and dominance in the market.
If this forward-thinking company continues on its current trajectory, it's likely that Amazon Go will become a staple in grocery stores across the globe.
Where does Amazon Go technology sit in the retail sector?
We recently looked at the impact of metaverse technology on the retail sector, exploring the possibility of taking retail experiences out of the physical world and into virtual reality. Surely this is counterintuitive to the physical Amazon Go store?
Not really.
Physical stores still dominate retail! Despite the pandemic, and more e-commerce orders than ever before, physical stores still make up 60% to 70% of overall retail sales. Amazon Go is set to transform those physical stores, whereas something like the metaverse stands more likely to take a slice out of e-commerce sales as it revolutionises the online shopping space.
Can technology really replace human interaction in retail?
There has been some scepticism as to what extent Amazon Go will take over physical shopping experiences - does removing human interaction leave a lot to be desired?
But we've seen it time and time again; technology replacing human tasks. Self-scan checkouts, automatic doors, online ordering and contactless payments are all examples of retail technology that have replaced the need for human interaction. But can retail technology really replace human interaction in retail?
Some would say yes - after all, Amazon Go does just that! It's a checkout-free solution that relies on sensors and cameras to track the items that each shopper consumes.
Others would say that retail technology can never truly replace human interaction, as we need to be able to speak to someone face-to-face in order to get the best customer service.
In this growing era of technology evolutions, with AR, VR and metaverse retail, we're inclined to say that unfortunately, (or fortunately?), technologies like Amazon Go will indeed replace human tasks, removing human error, improving efficiencies and meeting the demands of fast-paced everyday life.
Final thoughts
Interestingly, some while ago we conducted a major piece of retail research, looking at shoppper liking, disliking and overall emotional connection with 40 individual sections of a typical supermarket. And the most emotionally engaging and liked areas turned out to be…
…those that consisted of human interaction: Namely, the deli counter and the checkout.
We'd love to know what you think about Amazon Go technology - have you experienced a 'Go' convenience store or are you sceptical about its take-off? Drop us a message and let us know!
