Blog Post - Hugh Fletcher, Mar 5 2018

​Amazon Go: Reinventing Supermarket Sweep

​Amazon Go: Reinventing Supermarket Sweep

It seems that not a week goes by without Amazon taking up the headlines. Only this week I had the privilege of presenting the high impact eCommerce future trends to many of the world's leading brands and commerce decision-makers at the Commerce 2020 conference - an event that could have quite simply and accurately been otherwise titled 'Amazon impact'. Most recently, the chatter around the technology giant has been engulfed around the opening of its new Amazon Go concept store to the public, allowing shoppers to seamlessly purchase items without having to go through the laborious process of a traditional checkout.

Removing the friction

As we know, Amazon is best in class when it comes to re-thinking customer experiences. Unlike most companies that sit on their data and ignore their friction points, Amazon’s customer, service and margin focus is second to none, and is what drives it towards streamlining customer experiences – one-click checkout, Prime, Prime Now and voice ordering, are just a few examples.

The concept of Amazon Go is the physical materialisation of this streamlining, which has been its modus operandi for years. Rightly so, Amazon has identified that customers still want to have a physical experience, but they want it to be quick, easy and convenient, just like they want their online experiences to be.

Removing the checkout is eliminating one of the biggest friction points in the physical grocery shopping journey. Another example of this is its bookstores; which bring its learnings from online reviews, comments and recommendations, into a physical environment to help shape stock and influence purchase.

Amazon’s expansion

Over the years we have witnessed Amazon grow from selling books, to electricals, to almost everything under the sun, turning itself from a retailer, into a manufacturer and service provider.

Therefore, when it comes to the question of whether Amazon will expand its learnings from its Amazon Go concept into other retail industries, the answer, based on past form, is a resounding yes. This expansion into new verticals has been called “aggressive horizontal expansion” but could just as easily be called “giving the customer what they want, when they want, how they want”, and no-one is better at this than Amazon.

What does the future hold?

Amazon has expertly and strategically built a business model across channel and industries which provide the infrastructure (online shop, delivery capability, hosting etc.) that many organisations rely on to operate their eCommerce operations. It’s not too big a jump therefore to imagine that its ultimate aim will be to white label its Amazon Go concept and sell this to retailers. This undoubtedly will force retailers to use the Amazon infrastructure to survive and to give customers the experience they want, and further cement Amazon as an indispensable element of the retail world.

On the other hand, could we see large retailers fight back with a solution of their own? It seems unlikely when so many are only just integrating “innovations” such as self-scan.

Time and time again, Amazon’s ability to strategically plan for the future, to address friction points, and define consumer expectations will undoubtedly transform the retail environment.

Salmon, a Wunderman Commerce Company, is a leading authority on the impact and implications of Amazon. We truly believe no brand or retailer can afford to ignore the momentum of this tech titan. But, should you compete, collaborate, or both? To discuss how you can help future-proof your business against the might of Amazon, get in touch today.

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