The digital convenience store is here, and the future of convenience stores feels a lot like shoplifting! In this post I share my experience shopping at the newest Amazon Go store in Seattle.
A Memorable Shopping Experience …
My last article on this blog was about creating memorable in-store experiences. It focused mostly on low-tech and low-invest ideas. Recently, however, I had the pleasure of a memorable in-store experience that was, unfortunately, not so low-cost to create. I am talking about my visit to Amazon’s second Amazon Go store. I happened to be in Seattle on its second day of opening and was thrilled to seize the opportunity to shop there. Luckily, I had my best friend with me who lives in the US and thus has a US Amazon account; he’s the one you’ll see in all my photos.
… That Feels Like Shoplifting
As it was only day 2 of operations at the new store on the corner of Fifth Avenue and Marion Street, we were greeted by a company associate who was more than happy to explain the shopping process to us. He even helped us set up the Amazon Go app on our phone and we were ready to go – so far so easy!
Once we passed the scanning device at the entrance to arrive inside the approximately 150m2 store, we were met by shelves and cooling devices as one would find in any well-assorted convenience store. Signage was clear and visible, and all shelves were as neatly stocked as any ambitious category manager would love to see. The assortment itself was focused on the typical product categories that you find in stores catering to the busy working clientele looking for a small snack and a bite to-go.
Notably, however, the pricing for comparable products was overall lower than at the 7-eleven, two blocks away. From a competitive perspective, Amazon Go emerges as a clear threat to established convenience retailers. An easier and quicker shopping experience with lower prices? That’s a classic outpacing strategy; Michel Porter would be happy! Private label branding was also visible but not dominant. I assume that, similar to many other retailers, we’ll end up seeing a share of up to 20% of private label brands.
So, what makes this shopping experience so unique and memorable? Well, it’s the feeling you get from the way you shop. All you need to do is to take an item from the shelf and put it in your pocket. I really felt like a shoplifter and, at first, constantly had to remind myself that I didn’t need to worry about being caught in the act.
There were no employees around to do the catching anyway. However, the cameras would certainly have been up to the task. For cameras do cover every inch of the ceiling and track your every move along the store. They observe what goods you are choosing, taking, or putting back. In combination with technology that measures the weight of the items on a shelf, Amazon has created a new and truly convenient shopping experience.
After six minutes and sixteen seconds we left the store with our choice of snacks and within two minutes received the invoice via the Amazon Go app. Nice!
After experiencing it for myself, I will say that this shopping process definitively has the potential to become the new benchmark and threshold that any retailer who wants to be considered truly ‘convenient’ will have to meet. ‘Just walk out’ shopping!
A Technology for Smaller Convenience Stores Only?
What is Amazon going to do with this technology in the future? Will it be limited to the existing Amazon Go store format, i.e. smaller stores with limited assortment that cater to the convenience shopper? Or could it also be rolled out to a larger store format like WholeFoods and help cut store operating costs there? Only the future will tell.
So far the only indication on future plans we have is that Amazon plans to roll out 3000 stores featuring this technology globally by 2021. That, to me, sounds very ambitious and seems more likely to refer to 3000 convenience stores than to big box formats. Whatever the plan really is, it’s certain to have an impact on the respective competition. If you are a convenience retailer, you will need to react now to stop customer erosion. If you are a big box retailer you may have a little more time at your hands, but I wouldn’t count on it too strongly.
About the Author:
Christoph Berendes built his expertise as a consultant and brand manager in the brick and mortar world. His passion for all things digital transformation then turned him into a truly digital manager. He currently helps businesses grow their digital distribution. To discuss digital convenience stores and other trends, comment below or reach out to Christoph via email.