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Amazon Go opens its doors to the public – are we seeing the future of retail?

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Amazon has opened the doors of its first artificial intelligence-powered Amazon Go store in downtown Seattle to the public, enabling shoppers to use their smartphones to experience checkout-free shopping.

Amazon – which has already revolutionised digital e-commerce – has taken a similar approach in its bricks-and-mortar venture. The ground floor store allows shoppers to check in to the store with their smartphones using the ‘Amazon Go’ app at a turnstile, pick up the things they want – all the while watched and scanned by AI-powered tech – and then pay simply by leaving and, more importantly, without having to endure the pain of long queues.

By combining computer vision, machine learning, algorithms and sensors, the online retail juggernaut’s state-of-art store can read what people have purchased, as it adds an item to their virtual basket and charges their Amazon account. In case a customer changes their mind and returns an item back, their online basket gets emptied. When they leave the store, their shopping automatically registers through the app, and they are sent an electronic proof of purchase.

The vast premises, which cover about 1,800 square meters, are not without staff members, however. In fact, Amazon reports that there will be employees providing a customer service and maintaining the stock levels on the display. In addition, the Amazon Go visitors will be treated to ready-to-eat breakfast, lunches, and snacks, as well as some grocery staples like bread, milk, cheese and chocolates.

The retailer ranked Elite in IRUK Top500 research, initially announced the Amazon Go store in December 2017 and said it would open the doors to the public by early 2017. The debut was delayed because of a beta trial, which allowed employees to test out the store for functionality and practicality before it could open to the general public.

So will Amazon Go change the world of High Street retail as we know it? Terry Hunter, UK managing director at Astound Commerce, says that Amazon Go has reinvented the traditional retail store, integrating digital technology in order to achieve a similar level of convenience as shoppers have grown accustomed to online.

“Many pure-play online retailers are now making efforts to create in-store experiences to further grow their brands,” he says. “By creating this ‘in-store’ experience, Amazon has added tangibility to its grocery offering which did not exist before.”

According to Walker Sands’ Future of Retail report, Amazon Go is already growing in popularity at home, with 60% of the US consumers reporting they will likely to shop at the check-out free store. The study also reveals that the connected customer and the voice controlled devices are the future of retail.

Will other supermarkets follow Amazon’s example?

As yet, most retailers are struggling to stay ahead of customers desires and won’t only fail to catch up with Amazon, but, in fact, will stay behind, warns Brendan Witcher, a principal analyst at Forrester.

“Amazon has been working on this solution since 2012, and have quite a head start. Frankly, most retailers don’t have the will or persistence to work on an initiative that takes 5 years to materialize – it’s just not in their DNA.”

Terry Hunter says that in the short term, this is most unlikely:” Amazon’s market-leading position and online businesses will provide a financial cushion to support its push into physical retail. The new approach will also take some getting used to by shoppers: the camera identification and tracking technology in use in the store has experienced teething problems, and many consumers will likely see the move as a surveillance step too far.”

Hunter continues: “However, Amazon’s innovative move solves many of the issues which currently deter shoppers from going in-store, and drive them online instead. Not having to queue and being able to make purchases quickly will draw consumers to the Seattle store, with the frictionless experience – which Amazon is already known for – driving consumer loyalty. Most importantly, though, is the link the company has established between online and physical retail, with items automatically charged to shoppers’ Amazon accounts.”

He concludes: “Most other retailers will not be in a position to follow Amazon’s move at present. However, it is vital that brands innovate across all of their channels, and as Amazon has done, use bricks-and-mortar as an integrated digitalised part of a wider omnichannel strategy.”

IMAGE: Brendan Witcher (Forrester)

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