Amazon Go: New cashier-less grocery store opens in Seattle Amazon, Reuters On 23 March 1857, the world"s first successful hydraulic elevator was installed in the Haughwout Building, a new store in New York"s SoHo area. Though at five stories it was far from the tallest building in New York City...
On 23 March 1857, the world’s first successful hydraulic elevator was installed in the Haughwout Building, a new store in New York’s SoHo area. Though at five stories it was far from the tallest building in New York City and as such didn’t require an Otis elevator – the first of the now-ubiquitous machines – Haughwout realised that people would be enticed by the novelty of the new addition, and would be more attracted to his store.
Technology in all forms has fuelled a competitive advantage for retailers throughout the history of commerce, but today Amazon leads the disruption charge. Most recently its January 2018 launch of the ‘Amazon Go’ cashier-less grocery store in Seattle put the retail industry on alert for a new wave of change in their midst.
Just as Haughwout wasn’t the first to embrace technology, nor will ‘Amazon Go’ stores be the last. Now, with traditional retail entities such as Co-op, Tesco and Sainsbury’s announcing innovative plans of their own, the face of retail is set to change on many fronts.
Will the winners be those that introduce in-store tech wholesale, or those which take a different approach?
We sat down with three experts to understand their vision of future retail:
Alex Jones, Strategy Director, Fjord: Amazon isn’t the only answer
The recent launch of Amazon Go gave us a glimpse of what the future of retail could look like; no longer bound by cash and cashier, the tech giant’s seamless shopping experience got us all talking and traditional retailers scrambling to replicate its success. However, bricks and mortar retailers who find themselves captivated by an automated retail experience should look beyond the in-store tech.
The reason Amazon has been so successful is precisely because it doesn’t see itself as bound to a single sector – only to customer need. Because of this single focus, Amazon has a freedom of perspective that has allowed it to disrupt multiple sectors in unconventional ways. For those worried about Amazon’s encroachment into bricks and mortar, it’s this mentality that they should try to replicate.
What makes Amazon Go so significant is not the technology that powers it, but rather the disruption of the shopping experience itself. By removing queues, and subsequently limiting the human interaction necessary to leave the store, Amazon fundamentally re-engineered the emotional experience of shopping. In doing so, they made a conscious decision to occupy a particular space carved out in the future of retail – one characterised by convenience, and speed.
This is just one of many “shapes” that retail will take in the years ahead but there are a number of others that retailers can mould themselves into – for instance, favouring a “slow” retail experience or one that amplifies the role of “physical” and “sensory” elements of retail. Consider a bricks and mortar store that is designed around the consumer who wants to browse for half a day, like a museum or gallery, or the one who wants to experience cooking and tasting their meal before purchasing their ingredients.
Each of these retail futures requires reorienting the whole customer experience and are as valid as that which focuses on speed and convenience.
Geoff Wilson, Brand Strategy Director, Household: tech should bring out the humanity of retail
If retailers embrace the technology available to them like Amazon has done, they have the chance to turn the challenge of well-documented high street decline into an opportunity. It’s not as simple as stuffing stores with new gadgets; it’s about creating spaces that fulfil a customer need in a relevant way for the store and the brand.
The tech fuelled Amazon’s Go store provides a seamless, queue free shopping experience. Amazon is not the only brand using tech to meet the growing customer desire for super-convenience. Albert Heijn’s ‘Tap and Go’ convenience cards also demonstrate the value of a tech-enabled bricks and mortar experience. But as more brands experiment with frictionless technology, how they bring a touch of humanity to the experience will become all-important.
Customers don’t want to feel like walking dollar-signs when they enter a store, and that is a danger of over-automating the retail experience. What’s more, there are functions of shopping which are only achievable with some complex interaction – trying on items and experiencing the product, for instance, or human reference points which help the nuance of decision making, all of which ecommerce players still struggle to tackle successfully.
That’s because tech isn’t a solution on its own. While it provides the precision, automation and speed of information that facilitates a seamless shopping experience, it won’t provide warmth, humour, understanding or nuanced recommendations. Those qualities of human interaction remain irreplaceable – so while tech will help smooth certain aspects of the customer journey, having dedicated people on hand to assist customers remains a valuable aspect of the physical retail experience.
This could bring about a fundamental revival and reinvention of the roles of the shop floor assistant and manager: a transformation from backroom logisticians into maestros of customer experience. They should be hands-on in forming the behaviours of the store and customer service teams, supported by powerful technology in their pocket.
Ambreen Khasru, Director, myPOS: Retail is going micro
We’re currently witnessing how vulnerable bricks and mortar retail is to change, with shifts in shopper behaviour relating to online spending, consumer confidence, a fall in wages or a rise in inflation significantly dictating success or failure.
However, behind the headlines, we needn’t become so doom-laden about the future of retail. Instead, new technologies are providing opportunities, as well as challenges.
Mobile payment solutions specifically are playing an important role in democratising retail, enabling SMEs and sole traders to become viable businesses.
This tech is an important enabler as spending behaviour changes. It’s well documented that we’re increasingly entering a cashless society, but there’s been far less focus on what this means for SMEs and sole traders.
With the increasing maturity of mobile payment solutions, hobbyist entrepreneurs and micro-retailers are able to present themselves as credible businesses and meet consumer requirements by accepting cards.
As technology advances in this space, these micro-retailers are also able to avoid cash flow concerns frequently associated with card payments.
These retailers typically occupy pop-up space in a flexible way, according to their requirements. As a result, they’re avoiding the trap into which many of the large established retailers have fallen as a consequence of overextending their presence with physical stores during good economic times, making them vulnerable to a downturn in consumer spending.
Micro-retailers do face challenges of their own, with cash flow in particular more likely to pose a problem. This is in contrast with larger firms who can more easily draw on credit offered by big banks.
Again, technology has an important role to play here, with card solutions offering SMEs faster access to cash, set to prove vital.
There’s little doubt that it’s not an easy time for retail – but the sector as a whole can benefit from new entrants and new technologies seeking to meet changing consumer requirements.
How to Automate Video Content Marketing in Under 1 Hour
5 Easy Video Lessons +
Bonus Free Toolkit