21 Aug 2020 • Retail
Has the time come for the automated-retail revolution to finally catch fire?
Amazon Go is set to disrupt supermarkets in a big way, and automating the shopping experience as the brand has done has big implications for retail at large.
When Amazon opened its first Amazon Go store to the public in early 2018, analysts predicted it could soon upend Fast Moving Consumer Goods retail. Visitors were equally delighted with their first experience of what the company dubs ‘just walk out’ shopping. For those unfamiliar with what that means in practice: after customers are scanned at the entrance, they’re free to pick up any item and simply leave the store. A series of cameras and weight sensors automatically tracks what they’ve purchased and charge it directly to their account.
Two years on, however, why are only 24 further stores in operation? Some have speculated that the stores are too costly, the technology too complicated or appropriate locations too hard to find. In fact, it may have been that the format just wasn’t Amazon’s ultimate target. Amazon Go’s USP is convenience, but it was updating a (convenience) store format that already majored on speed; this offered an excellent testbed but only incremental returns in customer efficiency. In what context do consumers face a far more inefficient shopping experience? The supermarket. And that’s what Amazon has now launched.
Based in the ecommerce giant’s home city of Seattle, the store boasts a full range of products you’d expect to find at competitors such as Walmart or Kroger’s, minus the deli counters and in-house bakeries. Perhaps the biggest difference in product range over its convenience stores is the inclusion of fresh produce. Many consumers prefer to buy fruit, vegetables, fish and meat in-store rather than online, so physical retail is a key conduit for Amazon to access that market. One of the behavioural hurdles that Amazon overcame in creating the store was enabling its system to understand how shoppers pick up and inspect several apples, say, before selecting which to buy.
By bringing ‘just walk out’ shopping to the grocery sector, Amazon could rip up the long established rules of supermarket design. Photo courtesy of Amazon Go
At 966 m2 the supermarket is also about four times the size of the average Go outpost. Historically, increasing the number of shoppers has been a major technical hurdle for Amazon’s tracking technology, but that now appears to have been resolved. Of the store’s future potential, vice president of Amazon Go Dilip Kumar commented: ‘We’ve learned a lot. There’s no real upper bound [to the scale]. It could be five times as big. It could be 10 times as big.’
Having greatly expanded the inventory and square footage that its Go technology can manage, Amazon is now well placed to disrupt grocery retail in a big way. Whether this will be through its own locations or licensing the technology, the milestone could mean a subtle, but nonetheless radical change in the way supermarkets are designed.
Few commercial typologies have as many engrained spatial tactics as the supermarket. But without checkouts, how will impulse purchases be foregrounded at the right moment? With no need to funnel shoppers towards a set exit, will it be possible to prescribe circulation strategies? And, with millions of data points about current purchase trends generated every second, how can the display infrastructure become adaptive enough in terms of inventory and mechanizing to take advantage? Understanding how to design stores that take full advantage of this more fluid way of shopping is the next great challenge.