Amazon is pushing the boundaries yet again with its unique version of grocery store shopping. Amazon Go has been created to allow Amazon customers to purchase groceries by just picking items off the shelves and walking out of the store.
Sound too good to be true? Well, if anyone can pioneer his kind of tech, it’s Amazon. And, when you take a look at the details, it’s not as futuristic as you might think.
Amazon Go in Beta mode
The first check-out free, Amazon Go store has opened in Seattle. But, it’s still in beta mode and is currently only being used by Amazon employees. And, while amazon’s own press release about Amazon Go is pretty long, interesting and engaging, it’s a little lacking in specifics.
“Our checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion, and deep learning,” Amazon says. Sounds great, but what does that actually mean and how does it work?
Of course, this alluring yet vague description is completely by design. They’re guarding their unique grocery shopping plans until everything is in 100% working order. And, according to retail tech specialists who spoke to online tech mag Wired, it’s an entirely plausible plan. Particularly, given the ongoing development of Artificial Intelligence and a tried and tested combination of Amazon’s creativity and digital ability.
But, it’s also possible that Amazon is still working out any kinks in the technology. While the theory behind facial recognition should still hold up in a busy store, they need to be certain it works in practice. Getting shoppers in the store is one thing, but if they leave with a bag full of shopping that you can’t prove they took, profits are going to take a hit.
Amazon’s Grocery Plans Don’t Stop There
While much is being made of the new Amazon Go store, it’s not the only new development up Amazon’s rather large sleeve. According to sources at the Wall Street Journal, Amazon is also said to be planning a large multifunction or superstore.
Of course, that’s nothing new. But, the online giant is apparently going to provide the additional benefit of an online click and collect capability, similar to the system that has proven popular in the UK.
Building on the shop online and collect your product just hours later theme, Amazon’s grocery efforts are said to also span a drive through capability. This could be linked to a warehouse but not a walk-in store for customers.
Amazon Go may be grabbing all the headlines with its huge helpings of AI, detection and recognition abilities, even when stores are busy. But, it appears Amazon’s grocery-related online shopping ambition is far greater than that one option.
Will the Investment Prove Worthwhile?
That’s an important question. However, given Amazon’s current success and the clear position as a global online giant, one would assume they’ve done their homework and know exactly what they’re doing.
They’re still offering their Amazon Fresh convenience store option and home delivery. But, that’s likely proving less profitable due to the time and cost implication of delivering fresh food quickly, along with a route that’s sometimes difficult to manage.
This new plan to provide the convenience of online shopping, purchasing exactly what you want and then picking it up at your convenience (likely in a certain time slot), should prove less costly. And, the click and collect option is already working for some non-food goods, which means it knows how many customers are used to and like this way of shopping.
Looking at the swathes of data available on grocery shopping spend in the US, there’s certainly a lot up for grabs. That’s because, even though there are a number of grocery stores who already have a loyal customer base, their online following is virtually non-existent. And that’s how Amazon can swoop in and take market share – it’s already god-like online, shopping presence.
Shopping analyst Kantar Retail calculates the edible grocery market in the US is worth $674 billion per year. It also estimates online grocery shopping is just 1% of that. But, strong growth of online grocery shopping expected over the next few years – it’s forecast to be worth 5.4% or $59 billion by 2021. What’s the bet Amazon are planning to take the lion’s share of that growth, or even work to help it rise further and faster?
Amazon’s plans are said to target operating 2,000 physical grocery stores – not just in the Amazon Go format – across the US. By comparison, Kroger, the popular US grocery store, currently has 2,800 stores across 35 of the US’ 50 states.
Try it out for yourself in 2017
All this US-wide grocery shop talk aside, the Seattle Amazon Go store is set to remain in beta mode until “early 2017”. Then, provided all has gone to plan, it will be open to the public. To be followed soon after by the two other grocery store formats.
It’s an exciting time for Amazon and US grocery shoppers. If you can, take the time and try it out. You might be pleasantly surprised or unimpressed with the novelty. Either way, you’ve been involved in something groundbreaking and that’s not something you get to do every day.