With a simple video dropped on YouTube on Monday, Amazon laid a stake in the ground that is sure to send shockwaves through the retail world. Have a look:
While the online shopping giant is busy padding its coffers with record-breaking holiday sales, the Seattle-based company is beginning to turn its sights toward the brick-and-mortar shopping experience.
There were rumblings earlier this year that Amazon planned to get into the physical store game, and now we know that those rumors were true. Is its strategy a bit backward? Maybe. But, what Amazon plans to launch in early 2017 is the freshest take on retail that we’ve seen to-date.
Amazon Go is a physical retail store that looks and feels like a normal grocery-type store, except for one major difference: There are no cashiers and no checkout lines. The store will be built with shopping technology that, through an app, lets the shopper enter the store, pick up and put back items, and walk out.
“Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion and deep learning,” Amazon explained on its website. “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.”
The company will launch the convenient convenience store with one location in Seattle early next year. The space will be roughly 1,800 square feet (a little smaller than your typical 7-Eleven), and will carry everything from ready-made breakfast, lunch and dinner (cooked up by Amazon’s on-site chefs), to grocery essentials like eggs, milk, cheeses, chocolate, etc. The only thing the customer needs in order to shop at Amazon Go is a smartphone, an Amazon account and the free Amazon Go app.
The shopping experience at Amazon Go is one that every single retailer needs to take note of. While the product is akin to a local quick-mart with food items, the concept can be applied across a wide range of industries, and that’s likely what Amazon is ultimately gunning for. And considering how much of its revenue comes from electronics (more than 75 percent in 2015), it’s safe to assume that a Radio Shack replacement could be on the way next.
Doomsday-for-retail predictions aside, there’s a ton to be learned here from what Amazon is doing. It’s simplifying the retail experience for the consumer. Amazon understands why its online business has been so dominant, and it’s now applying that same strategy to brick-and-mortar.
It all boils down to simplicity. Consumers want a simple shopping experience; one that doesn’t cause stress or take up too much time from their day. At retail, stress and time-consuming typically apply to the checkout process — especially now that we have these chip cards that take longer than ever to complete the transaction with.
If you can remove the checkout process, you take out all of the stress of having to dig for one’s wallet and have items individually rung up, or missing barcodes that require a walkie-conversation to figure out the price. The consumers can literally walk into a store, find whatever it is that they’re looking for, and walk out.
That’s simplicity, and that’s what Amazon is doing right.
The one exception to this rule, always, is the showroom experience. It might be a smaller percentage now than ever before, but consumers are always going to want to see a product — especially larger electronics — before they spend hundreds or thousands of dollars on them. So the showroom will always have its place in this industry.
But that stated, retailers already have a lot to learn from the e-commerce giant in regard to successful online retailing. Amazon, now, is about to start a whole new chapter on the physical shopping experience. And any smart retailer is going to pay very close attention.
Rob Stott is corporate communications manager, Nationwide Marketing Group