Amazon Disrupts Again: Here’s what you need to know
Ever since the announcement of Amazon Go and its promised checkout-free shopping experience, retailers have been left wondering, “what does Amazon Go mean for the rest of retail?”
There is no doubt it’s an exciting time to be in the business of delivering technologies that move the needle on physical store shopper experiences and this announcement fast-forwards the need to make the investments that drive a new kind of retail. But should every retailer be thinking about a cookie cutter approach to what Amazon is doing? Probably not. Should retailers be panicking? Maybe.
True to its character, Amazon has done a very smart thing, choosing, as it did with books over 20 years ago, a category ripe for disruption.
Americans buy groceries pretty much the same way they have for the past 100 years, and there isn’t much that has changed about the physical grocery store environment. The biggest disruption that has stuck to date in the grocery space has been the self-checkout, and even that is fraught with friction.
With all the technology available to retailers, the devil is in the details. The notion of a check-out free grocery store has been around for ages, but the technology hasn’t really been available until now – and it’s still an open question whether those technologies are ready for prime time. If you employ self-scanning, for example, you still need to have a compliance check, which requires a person ensuring no mistakes were incurred in scanning – so, only marginally easier than self-checkout. But, with the advancements in IoT and other sensor technologies, the ability to create a technology-powered experience eliminating one of the biggest points of friction from the shopper experience is closer and closer to reality.
The ability to measure in parallel product movement – with RFID, for example – and human movement – through video analytics – opens a whole host of opportunities to service customers in new ways. Both technologies have come a long way.
With video, retailers measure very precise movements of customers through large environments. With stereo cameras, retailers measure very precise tracks with high degrees of accuracy and an ability to segment tracks by age, gender, employee vs. customer, etc. that provide a tremendous amount of information about what is happening in-store.
The advancements in RFID reader technology, particularly in fixed readers, gives a very good view of where all tagged product is at all times. Embedding video into sensor platforms goes a step further to give, for the first time, the ability to bring shopper and product movement together in one place at the same time. Software then takes all of those tracks and gives insights into what is happening within a store, and from that data retailers like Amazon can get really creative about what that means from a customer-facing application perspective.
Amazon chose to tackle grocery and to eliminate the checkouts, but this is probably not the path that all of retail will take. While it lends itself to the somewhat soul crushing experience of grocery shopping, other categories like apparel will need to evolve in other ways. Smart fitting rooms are already becoming a must-have for many retailers, and there is still a tremendous amount of opportunity to further evolve and better that experience. With different categories of retail, each has their own unique challenges and opportunities to evolve. While the go-forward strategies won’t all look like Amazon Go, they will likely look much different in five years than they do today.
Below are eight top tips for retailers that are asking, “What does Amazon Go mean to me?”
1. Don’t Panic. Amazon isn’t going to build thousands of stores overnight, and until real shoppers pressure test the experience, it’s hard to know exactly what the impact will be. There are other unknowns like accuracy and compliance that will need to be well-vetted. It’s one thing to inadvertently give away an occasional can of soup, but it’s more damaging to charge for a can of soup that isn’t in the basket. Moreover, other categories have more potential for real customer dissatisfaction and inventory shrink issues if the product and the charges don’t line up perfectly.
2. Panic. Amazon has a proven ability to change how customers consume products. Remember, it started with one simple thing – and not only did it disrupt how customers buy books, it changed how they consume the written word altogether. That’s big.
3. Make a plan. If you aren’t thinking about how you collect, analyze and action data in your stores, you are definitely behind.
4. Focus. Start with your shoppers’ biggest pain points and work from there. Don’t try to boil the ocean, but do try to remove some of those points of friction from their experience.
5. Be bold. Part of having an effective plan is being willing to go way outside of the box. Will all of the technology work? Probably not, but you will learn a tremendous amount and you may even find a big, disruptive idea of your own.
6. Engage. Bring your business partners into the conversation and try to find ways to leverage data and information across silos – or better yet, tear those silos down.
7. Educate yourself. Understand some of the in’s and out’s of the technologies available – even if you aren’t a “technology person.” Understanding the technology even to a certain degree will make it much easier to think about how to solve the problems of today.
8. Go shopping. Many retailers will admit they spend almost no time in stores other than their own. Learn from the digitally native or otherwise innovative brands or that are all disrupting in their own way – Warby Parker, Lolli & Pops, Rent the Runway, etc. are all great places to start.
Bridget Johns is head of marketing and customer experience at RetailNext.
Through its centralized SaaS platform, RetailNext automatically collects and analyzes shopper behavior data, providing retailers with insight to improve the shopper experience real time. More than 300 retailers in over 70 countries have adopted RetailNext’s analytics software and retail expertise to better understand the shopper journey.