Amazon Go, official page
AmazonGo – the automated innovative store opened in early 2017 in Seattle – generated a lot of hype too soon. The beta version failed, because the mobile application could not handle more than 20 clients at the same time. For now, it seems, grocery stores need a “human factor” to be fully functioning.
What was Amazon Go, what were its purposes and value points?
The whole experience was based on the total absence of cashiers or checkout line. Thanks to a very hot technological mix (machine learning, computer vision and artificial intelligence), a customer could pick any item and be directly charged on his Amazon account just walking out the door. It was sufficient to download an application. All the item chosen from the shelves were listed on a virtual cart.
From the patent filing: “The exit of the user will be detected and, as the user passes through the exit (transition area), the user, without having to stop or otherwise be delayed, will automatically be charged a fee for the items (the items are transitioned to the user).”
To improve the reliability of the system, Amazon Go used also a sensor fusion technology, combining the data of different sensors in order to maximise the accuracy. “By combining multiple inputs, a higher confidence score can be generated increasing the probability that the identified item matches the item actually picked from the inventory location and/or placed at the inventory location.”
It’s not hard to imagine how great the customer journey would have been in this kind of shop: no waiting in line, no struggling looking for the wallet inside you bag. Just pick the food for dinner and go.
“Just pick the food for dinner and go“
What about the pain points?
One main pain point was of course the technological flaw, that eventually caused the failure of the beta version. Without going into technical details, this means that we will have to wait a while before the “just walk out technology” becomes the new normal.
But do we want it to be the new normal? One major problem is the absolute lack of human contact in the AmazonGo concept. As Forbes pointed out, do we really wish that our weekly shopping happens at a giant, anonymous vending machine? This does not seem like a win, and it’s definitely something that competitors (and Amazon itself) should reflect on.
Another big concern is the one about digital privacy and data storage. It’s not only an issue regarding this particular store or this particular technology mix. But in this case the consumers will be leaving their digital footprints all along a whole new area of their lives, the grocery shopping at the mall down the road. As the customer awareness and sensitivity about digital privacy arises, the “Just walk out technology” may experience a backfire.
A Second Opinion
When Amazon Go was first announced, stock from other big retails took a dive down, instantly: it wasn’t a free fall, just a nudge, but that can’t be really coincidentally. So what’s happened?
Aside from the economic perspective, we can take for granted that Amazon is a nasty giant to deal with not in terms of size, but in technology and data: the overstanding achievement of Amazon is its self sustained chain of service, from the need to the order to the customer care and the retention, a service solely enabled by its formidable technological platform.
If it were only a matter of technical capabilities other retailers should fear not, however technology itself isn’t and never will be the point, the point is the pivotal role of the experience businesses.
Amazon superefficient distribution pipeline, superlative customer care and self sustained business without compromised are all together geared into serving a superior customer experience in order to bound customers in a eternal cycle of retention, but what about the other traditional players? They created a business centered on a price driven strategy where their cut is only created by a reduction of costs rather than a creation of value. In this time of uncertainty, It is too risky and too expensive for them to embrace any kind of change, let alone one in the opposite direction such as a experience or a value based strategy. That’s why they fear so much new players: they are not able to modify their crystallized organizations, they are scared by a possible change because a change itself it’s utterly out of their reach and it’s unachievable.
Initiatives like Amazon Go are a sound proof of capability intended to shows how Amazon is able to leverage those weakness, whenever they decide to.
References
Student of IPM @Unibo. Interested in political science, economics, media, technology & innovation. Curious,
proactive and always up for new experiences.
proactive and always up for new experiences.
