Fill up and Go
Amazon.com have declared that they are going to open a physical grocery store called Amazon Go starting in USA. A once on-line-only company have decided to let people walk in and fill shopping bags and walk out without paying at a checkout.This concept focuses on convenience and time-saving. The store will be run by a web of technology where people just sign in at the door with their Amazon app, by pressing their phone against a sensor. That signs them in and then everything else follows automatically. Amazon Go, as it is calling the shop, uses a range of technologies to watch over people and see what they take from the shop. After leaving the store, the payment will process through their Amazon account for everything that they’ve picked up.
“Our checkout-free shopping experience is possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning,” states the company on their website. In addition it says, “Our Just Walk Out technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you’re done shopping, you can just leave the store. Shortly after, we’ll charge your Amazon account and send you a receipt.”
Opening in Seattle
The shop looks just like a real store, filled with products. The first of the Go stores will be opening next year, in Seattle, Amazon’s home town, in early 2017. And its arrival could pose critical questions for the wider retail industry. For starters, Amazon Go will probably use fewer workers than traditional stores that rely on cashiers and clerks. If shoppers respond favourably to this customer service model, it may have a domino effect on similar set-ups to try to save labour costs.
Pressure on competitors
Consequently, if Amazon Go are successful in their venture and expand widely, it will put serious competitive pressure on a wide range of retailers. For start, Amazon Go are targeting quick errands when shoppers need just a couple of items. In recent years, convenience stores have proved to be potent competitors to supermarkets for those kinds of shopping trips. A fast-growing Amazon Go could present competition for chains such as CVS and 7-Eleven.
The company is promising that it will sell prepared foods made by “on-site chefs,” meaning it will be fighting for the same breakfast, lunch and dinner spending that fast-casual and carryout restaurants vie for. Amazon Go also plans to sell pre-packaged meal kits with the ingredients to make a home-cooked dinner for two. That could produce competition for the wave of meal kit start-ups such as Blue Apron, Hello Fresh and Purple Carrot.
As a result, Amazon Go will face no shortage of challenges as it aims to transform the model. Filling one’s refrigerator has long been a convenience battle, where the closest store to your house is usually the one that gets your money. It will take a long time and a lot of money for Amazon to create that kind of store network. And it’s not for certain that what it calls “Just Walk Out technology” will win customers over. What if shoppers find it off-putting and impersonal? or it is full of errors.
More Grocers to follow the concept
Major grocers are unlikely to face shock by Amazon’s announcement. Rumours have been circulating for months that the company planned to open grocery stores. And the e-commerce company has already shown interest in physical retailing by opening book stores. So, in theory, legacy chains have been preparing for Amazon to join the game.