I had the privilege of visiting Seattle recently as part of an SGF National Executive study tour to visit the original ‘just walk out’ Amazon Go store. Having read so much about it, actually stepping inside was always going to be a bit of an anti-climax. And it was.
For a start, it’s smaller than I expected at just 1,800sq ft. And while it’s quite pretty, I’ve been in a hundred better looking stores.
But standing in the store it dawned on me that this is entirely missing the point. Walking into Amazon Go is like walking into the internet. The store is the closest thing you will find to a physical version of the worldwide web. The camera technology that powers the store effectively turns Amazon Go into the bricks and mortar equivalent of an online Amazon webpage.
The fact the cameras enable faster, more convenient shopping is merely a happy by-product. The real point of the cameras is to ensure that everything that happens inside that store is turned into data which can then by analysed and turned into insight in exactly the same way Amazon manages its websites. Walk into Amazon Go and you’ve basically walked into Amazon’s website.
As well as capturing every transaction and tagging it to an individual shopper, the cameras also capture all in-store ‘browsing’ activities. Things like picking products up but putting them down again. Spotting when consumers browse a fixture but then buy nothing from it. Identifying hot spots in the store. All these activities which can’t be tracked using EPoS provide Amazon with invaluable insight – and all in the same way Amazon tracks online behaviour. Whether you clicked on a button, how often you revisited the same page, how many times your cursor hung over a particular ‘buy’ button but didn’t click it.
And it’s data that makes the threat of Amazon Go so daunting. Amazon’s online-only pedigree means that it views the world entirely differently from most of the retailers it will compete with in bricks and mortar. Online businesses are driven entirely by data and Amazon is truly customer-focused in a way that is incomprehensible to offline businesses. Amazon doesn’t want to specifically sell you books or clothes or soft drinks or TVs. It wants to sell you whatever it is that you want to buy when you want to buy it in the way you want to buy it. And it devotes much of its time to understanding what you want. This is fundamentally different from the way conventional retail operates, which is basically trying to sell you the range it stocks in the most profitable way.
In Amazon Go, machine learning will drive ordering, ranging and merchandising at a single store level, constantly updating and improving every aspect of the store in real-time with almost perfect knowledge. The Amazon Go store will have access to your entire in-store transactional history. Not only that, it will have access to every transaction you’ve ever done with Amazon full stop.
Data gives Amazon the power to make the lives of consumers better – and consumers love it. And it’s coming to a street near you soon. Amazon is already looking at around 200 sites in the UK. The really big question is: how does the local retailing industry prepare for this brave new world? The answer to that question is not a simple one.
Antony Begley, Publishing Director