TechBytes: Lessons learned from Amazon Go

For such a small store, Amazon Go, which finally opened its doors to the public in January, has created quite a buzz. Sure, some of the hype surrounding it was just that. But most of it was warranted; Amazon Go provides the best example to date of how the online giant is using technology to make shopping as convenient and painless as possible. And there are lessons to be learned for retailers from it.

Designing an entirely automated, cashier-less store is certainly not in the cards for most retailers. And the fact of the matter is it shouldn’t be, given that retailers’ bricks-and-mortar formats, products, processes and customer needs vary widely by category and may not fit the overall Amazon Go model.

But retailers that dismiss how Amazon Go uses mobile technology to craft the most convenient of shopping experiences — one that reduces friction at every touchpoint— do so at their own peril.

Here are four actions retailers should take based on the lessons learned from Amazon Go:

1. Get a handle on mobile. The online giant’s automated experience is guided by the Amazon Go app. Shoppers launch the app as they enter the store and the in-store technology (integrated with the app) takes over. Customers’ Amazon accounts are charged for the order when they leave the store and they receive a digital receipt.

Companies that already have a mobile app are on the road to this “walk-out” experience. By leveraging smartphone GPS technology, retailers can monitor where customers are browsing, the merchandise they are buying and even allow them to pay on their way out the door.

2. Go cashier-less in some form. The type of completely automated checkout experience that Amazon Go offers is not realistic for most retailers, at least not at this point. But companies can create their own version of cashier-less checkout. The key is to merge existing self-checkout initiatives with their own mobile apps that offer e-wallets. This enables shoppers to pay for orders with a single scan of their phones at dedicated POS stations or right in the store aisle.

3. Put stock in inventory — but in a new way. Inventory distortion, or sales losses caused by out-of-stock merchandise and those resulting from deeply discounted overstocks, is costing retailers nearly $1.1 trillion globally, according to IHL Group. Amazon Go is trying to keep a lid on these losses through sensors, smart cameras and analytics that can monitor store shelves — and each time an item moves — in real time.

While retailers often rely on associates to do this kind of cumbersome, and often manual, planogram compliance monitoring, they can create their own version of shelf monitoring. By integrating object recognition technologies, such as RFID, within existing in-store camera systems and analytics, retailers are positioned to get more immediate insight into item movement.

4. Push the AI envelope. As more retailers leverage AI, they tend to focus their efforts on chatbots and predicting customer shopping lists. However, companies that are willing to push the boundaries of AI, and the deep insights it delivers, will be able to learn about — and better serve — customers in a more personal way.

By blending AI within store-level operations, retailers can get a better handle on shopper preferences, merchandise assortments and in-store placement, stock levels and even deter shoplifting. This will prepare retailers to offer more consumer-centric, localized assortments, keep shelves stocked during peak shopping times and protect more expensive or coveted merchandise.