Amazon Go revamping convenience store shopping

20 March 2019 Consulting.us

The new checkout-free stores from e-commerce and tech giant Amazon are upping how convenient a convenience store can be. 

Amazon Go is one of the more recent cards played from the technology juggernaut’s deck of disruption. It aims to shake up the convenience and grocery store sector, though Amazon has plans to eventually try out 40,000-square-foot, Ikea-style megastores. For now, Amazon Go locations have a smaller, convenience store-size footprint, with similar product options, as well as "millennial bait" such as chef-designed Amazon Meal Kits, in the vein of meal preparation delivery start-ups such like Blue Apron.

As of February, there were four Amazon Go stores in Seattle, four in Chicago, two in San Francisco, and plans to launch a London location. Amazon hopes to eventually open 2,000 grocery and convenience stores in the US.

As with most Amazon offerings, the new Go stores center on technological innovation and leading-edge customer experience. Customers don’t have to wait in line, there are no cash registers, no checkouts, no item scanning -- consumer simply pick their items and leave.

Amazon Go revamping convenience store shopping

After downloading the Amazon Go app on a smartphone, consumers tap their phones to pass an automated turnstile to enter the store. Technologies such as computer vision, sensor fusion, and deep learning are used to detect when products are taken, and keep track of them in the shopper's "virtual cart." When consumers leave the store, their Amazon account is automatically charged and a receipt is sent.

The trade-off for extreme convenience and good prices is decreased consumer privacy. Customers will be tracked by higher-tier technology than typical convenience store cameras to ensure the billing process is accurate. Obviously all purchases are recorded, giving Amazon a full rundown of what (and potentially how) people make purchases. Amazon receives valuable data on purchasing habits and history, and on a surface level can find and revise an optimal mix of products for consumers at particular Go locations.

Changing the game

Many users are impressed by the Amazon Go experience, including Brian D. Gray, a managing director at Accenture’s Energy industry group. In a recent blog post, Gray related how he was able to get the exact product he wanted (a sparkling Smart Water) at a Chicago location in 15 seconds. When he later went to a competing convenience store, it took him three minutes and two seconds to get in and out - and he had to settle for a non-carbonated Smart Water.

According to Gray, Amazon Go has changed the convenience store experience in five ways: speed, product selection, no checkouts, price, and consumer tracking.

“It is absolutely incredible that my experience through Amazon Go was over 2.5 minutes faster than the typical convenience store,” Gray wrote.

Because Amazon is tracking everything that is purchased and updating inventory accordingly, you’re more likely to get the product you want. “Amazon Go has a carefully curated product assortment that aligns to the demographic of their consumers," Gray wrote. 

Amazon Go’s products are also priced to entice. According to Gray, his Go-bought sparkling Smart Water cost $1.75, while the (non-sparkling) Smart Water from the traditional convenience store was a heftier $2.60. Though they’re transforming the convenience experience, Amazon’s still keeping its eyes on what consumers often most value: price.

As previously stated, Amazon Go is logging huge amounts of consumer data. “No more guessing what consumers want and how often they are coming back – it is all right there for Amazon to make better future decisions in service of their consumers,” Gray concluded.

Related: Amazon, Berkshire Hathaway and JPMorgan Chase hire Monitor Deloitte


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