As a company who was such a pioneer in bringing the shopping experience online, it has been interesting to see Amazon applying their knowledge and business acumen to reinventing physical retail. We saw a few brick-and-mortar Amazon bookstores, the first in Seattle and later rolled out to other cities, which have store displays that include customer ratings and reviews from their website - as well as showrooms for their new products like the Alexa Echo, Dot, and the Fire TV. But the real game changer happened this past week in an unexpected category when Amazon announced the opening of a new physical retail supermarket concept.
The Amazon Go retail hardware/software system will allow shoppers to grab groceries and go, never having to get out their wallet or stand in line for checkout. No dealing with grumpy cashiers, long lines, or any clunky checkout machines. Amazon calls it the “Just Walk Out” experience - one that uses visual sensor technology to detect the movement of products on and off shelves, simultaneously docking it in a virtual cart connected to your Amazon account (and hence your credit card). It will be a time saver and provide an improved shopping experience. No surprise, the first store is scheduled to open to the public in Seattle in early 2017.
Of course it brings its extra benefits for Amazon itself, too, beyond just retail. Amazon will be able to look at how you shop, routes you take around the supermarket, and what you do or don’t decide to buy. This will allow them to continually shift the layout of products and operations in the physical store itself, as well as give you more accurate recommendations in your Amazon online shopping. Advertising could even come into play with having targeted messages show up on well-placed screens (hello Amazon Fire), or audio messages (hello Alexa), based off the store technology recognizing who you are and you approaching that screen or speaker.
If successful, there will be plenty of established supermarket brands interested in licensing the Amazon Go hardware/software system. That's already a bonus and business model in itself. But then you think all that data that this licensed technology would be taking in and the need for these giant supermarkets, which now need someone to manage and store that data. So the genius side effect, or maybe even the primary reason, is that Amazon may cross-sell their Amazon Web Services (AWS) to a whole new customer base. It's another win-win.