Where’s Amazon Going with Go?

If you’re the kind of person who would rather order their pizza online rather than pick up the phone, or slink through the self-checkout at the pharmacy rather than exchange pleasantries with the cashier, then you’ll love Amazon’s latest retail innovation.

To cap off 2016, Amazon dropped Go, a frictionless, in-store shopping experience, on an unsuspecting market. Amazon Go is a new kind of grocery store that encourages shoppers to “just walk out” without the hassle of lines, bagging, stopping to get out their wallets, or interaction with other humans. But to be clear: Amazon is not encouraging shoplifting, just responding to consumers’ insatiable appetite for convenience.

Download our Definitive Guide to Optimizing Brand Performance on Amazon

Through a combination of smartphone tracking through the the Go app, sensor fusion, and computer vision, Amazon’s in-store technology can track which items shoppers add to their basket and charge their accounts accordingly as they leave the store. With this pilot program in Seattle, time-bound shoppers can get in and out of the store faster than ever before withamazon go the first-ever truly “grab and go” system. While some retailers have moved to installing employee-less self-checkout kiosks or have adopted Apple Pay, Amazon Go has eliminated the checkout process entirely, staying true to their consumer experience-centric vision.

Will Shoppers Choose Convenience Over Privacy?

Probably–it’s a tradeoff more and more consumers are willing to make. But some might balk over the hyper-surveillance that enables the Go experience.  To counter the convenience factor,  traditional retailers may be able to offer a more  “private and secure” shopping experience, setting themselves up as the “anti-Go.”

Amazon’s Brick and Mortar Experiments

With its recent entry into the online grocery space with Amazon Fresh, the move into in-store grocery retail came as a surprise. However, Amazon has experimented with traditional retail stores before.  Amazon bookstores currently have three locations on the west coast with plans for several more openings in Boston, New York, and Chicago. It is unclear if Amazon’s bookstores will be major revenue drivers or if their main purpose is to act as a showroom for online fulfillment.  But one thing is for certain: Amazon sees enough value (whether that’s revenue or in R&D purposes) in offering a true omnichannel experience that it’s investing resources into the expansion of locations and categories.  

Why Go? Reverse Engineering Amazon’s Motives

While most retailers are still reeling with as shoppers migrate out of malls and to the web, Amazon is miles ahead by incorporating IoT (Internet of Things) and applying it to the retail space. Though other bricks and mortar retailers have begun to test how they might address the convergence of the digital shelf with the in-store shelf, they’ve struggled with how to make omnichannel retailing really come to life. For example, Walmart has focused on spending billions to upgrade their ecommerce plans, but there has been little focus on using the IoT in retail stores in general, save for Kroger’s recently-announced interactive digital shelves.  The omnichannel consumer wants to shop and convert where, when, and how she wants, and Amazon surprised us all by showing other retailers what they could have been doing to reach those shoppers. 

Amazon has some experience in this space already, testing the waters with its Dash Button and Alexa assistant. Go represents a convergence of their powerful ecommerce data, retail showrooms, and IoT technology. Given the speed with which Amazon races from beta to shipped product, Amazon could be concocting a powerful cocktail that will be difficult to counter.

Amazon’s Multi-Front War

This past year was tough for the retail sector, with job cuts reaching 24,000. The outlook for the industry will depend on the percentage of users shifting online, as Amazon continues to erode in-store sales across every major category. Now Amazon is moving into the brick and mortar space with its first grocery store. By bringing its fast innovative approach to shopping, Amazon may be trying to force retailers to compete on multiple fronts.

Attempting to own as much of the consumer experience as possible from discovery to consideration to purchase. And don’t forget that Amazon is in the manufacturing business as well with its Basics line of tech products as well as several clothing lines.

How Brands Can Respond to Amazon Go (or Future Copycats) 

Shoppers frequently check both ratings and reviews as well as make price comparisons on their mobile devices while shopping in-store. It would be feasible for Amazon to make its own data visible in-store at Go or other types of retail stores. For example, posting average star ratings of items or allowing shoppers to surface a cooking recipe on their phone as they walk through aisles. If shelf space is limited, then the Amazon Choice item may be selected for display. If this is the case, then it is more important than ever that brands optimize across key online metrics on Amazon. By establishing themselves as market leaders and continuing to perform online, brands will reap the rewards–be they in-store or online–of any future innovation by Amazon.

Download our Definitive Guide to Optimizing Brand Performance on Amazon

Danny Silverman

Danny Silverman

Danny Silverman is CMO at Clavis Insight. He is an established industry thought leader with over 14 years of experience helping CPG/FMCG brands grow online presence and sales. Prior to joining Clavis Insight, he led the Sales Strategy & Support practice at Catapult eCommerce. Before that he spent eight years at Johnson & Johnson where he was responsible for spearheading J&J’s eCommerce strategy and capability.