Amazon’s ready to go with grocery shops, but are shoppers ready for Amazon Go?
The rise of connected grocery has not been meteoric or particularly headline grabbing. Apart from a handful of examples, the addition of IoT to supermarket has been low-key and largely functional: connected price tags mean staff don’t have to manually replace labels when new deals are released, and mobile store loyalty cards mean a marginally slimmer wallet. Things that gently improve the customer experience but that (for the most part) haven’t made the world sit up and take notice.
Enter Amazon Go.
Our collective imagination has really gone to town on Amazon’s newest offering. Not content to be the undisputed emperor of ecommerce, the brand has been rolling out brick & mortar stores and pop-up shops with relatively little fanfare for a while now. It’s also not entirely new to the grocery game; AmazonFresh offers online grocery and produce shopping for home delivery, and the iconic Dash button is still being pushed in homes around the country.
Amazon Go cranks it up to eleven and introduces a completely connected, tech-driven, checkout (and checkout operator) free grocery shopping experience. While it’s only available in a single store (and only to Amazon employees at this point) there are plans to widen Amazon Go’s net in the new year.
As expected, reaction has ranged from “technology is awesome” to “we’re all doomed”.
What price efficiency?
Given that we’d all appreciate a faster, easier, preferably cheaper shopping experience, but would also quite like to not put people out of work, are we OK with Amazon Go’s promise of a completely de-humanized grocery store? After all, retail jobs are among the top 3 most likely to be replaced by technology in the next 20 years according to The Economist. Do we really need to hasten things along? Is this a slippery slope down which we are about to be pushed?
We love people, actually
A recent study conducted for Salesforce found the majority of shoppers would rather deal with humans at the checkout, with 72% disagreeing that robots could replace store associates; and Verint reports that 83% of consumers it surveyed believe it’s important to have the option to talk to a human representative on the phone or in-store. UK chain Morrisons actually added staffed checkouts back into its stores when over 60% of customers were found to prefer them to self-checkouts.
When it comes to purchases, most shoppers stick with the tried and true: 65% check out with an associate at the register, vs 22% at a self-checkout and only 5% on a mobile device. While the numbers may be low now, Nielson reports 65% of global consumers are willing to use a self-checkout if it’s available, and 72% would use scan and shop technology.
The overall theme appears to be that consumers are receptive to new technology at the checkout, but they don’t want to lose the human element. OK, so maybe if they’re not on the registers it’d be a good idea to keep store associates around in a supplemental capacity; as greeters, concierges and in-store entertainment, or as overseers, bag checkers and basically a last line of defense against unwitting or unscrupulous consumers out to bilk the system (apparently a major issue facing self-checkout stores; presumably something Amazon Go has solved for with its tracking technology).
Connected stores will only work for connected consumers
Speaking of tracking, there is a wider conversation to be had around the overall connectedness of the Amazon Go experience. In order to accurately identify customers along with their shopping behavior, preferences, basket contents and billing information, the store will need access to a vast amount of individual data. And it will need to do some pretty heavy real-time lifting, so you’re not going to get away with simply logging into an app. We’re talking location trackers, cameras, voice and facial recognition in addition to the less literally in-your-face technology. While consumers are more accustomed now to giving over data in return for personalized offers, not everyone is comfortable with the level of tracking required to create Amazon Go’s level of invisible connectivity.
In the same Salesforce study, consumers were slightly opposed to sharing data for a better in-store experience, and far more strongly opposed to stores using location technology to identify them as they walk into store: 73% against vs 27% in favor. Some of this is unsurprisingly attributable to generational differences. Baby boomers and older consumers aren’t as keen on connected technology as younger generations - a finding repeated in study after study, and one we’d expect to see have a marked impact on the uptake of an Amazon Go type shopping experience.
Is it Go time for grocery?
So is this the future of grocery shopping? If you accept that one day everything will be automated and optimized and digitally enhanced, then probably, yes. But we have a long, long way to go before the Amazon Go experience is mainstream.
It’s still very early days for Amazon’s Just Walk Out concept. Remember, we’re talking one beta store in one location, and one that’s so far only available to Amazon employees. We also don’t know exactly what technology is being used to work the Amazon magic, but given that it’s Amazon, it won’t have been cobbled together with parts from the local Radio Shack. Industry commentators have come up with a laundry list of possible tech including computer vision, sensors, machine learning, deep learning, real-time analytics, cameras, biometrics, artificial intelligence and RFID, but Amazon’s not letting us see behind the curtain just yet.
So we’re talking a comprehensive, radical re-imagining of the grocery store experience, and that alone is enough to tell you the majority of food retailers won’t have the resources to make this their reality. While big brands like Costco, Kroger and Sam’s Club have implied they’re doing something very similar (nobody is, not on this scale) the simple truth is an invisibly connected, IoT-centric grocery experience like Amazon Go is light years ahead of what most are doing, or are capable of right now. Given that many smaller local chains have yet to move beyond electronic point of sale, it’s a bit naïve to suggest they’re going to be in a position to copy Amazon any time soon.
20 years down the track though, when digital natives are the majority and connectivity is king? We might have witnessed the end of the checkout operator – though hopefully not the end of retail associates altogether.