Amazon Go could be a game changer for food retailers, but whether it should be keeping them up at night will come down to how quickly Amazon can deploy it, according to Neil Stern, senior partner at McMillanDoolittle, Chicago.
“I think there are two things happening here. One is the potential for tremendous labor savings for the retailer’s front-end and also that it could be wonderfully convenient for consumers not to have to wait in line for checkout,” Stern told SN.
But much remains to be seen about Amazon’s plan for the checkout-free retail experience that emphasizes fresh and convenient fare.
“Does it actually work and is it scalable?” asked Stern. “They’re showing it in a c-store format but is it scalable to a larger scale store and how fast can they potentially roll this out? There are talks of 2,000 stores but again, until they actually have it running, it’s really hard to speculate.”
Justin Behar, CEO of San Francisco-based Quri, which specializes in performance-driven merchandising, believes that Amazon Go will catalyze traditional food retailers to modernize their stores and in-store experiences.
“The retail environment looks like it has for a long time,” Behar said. “Even though the perimeter is getting more significant, it still has the feel of classic grocery. So I think one of the things we’ll see is an acceleration to create more impulse purchase opportunities in the store and the ease to get people in and out of the store quickly with the exact things that they want for lunch and dinner."
Stern noted that Amazon Go should at least spur retailers to revisit conversations about in-store technologies and consider expanding click-and-collect and online delivery services.
“I’m not a technologist and don’t know how difficult it would be to replicate what Amazon has put in place and it feels potentially pretty difficult, but there are things that people can do in the interim that provide an alternative,” said Stern who noted use of apps that expedite the checkout process.
Alfred Holzheu, co-owner of three-store California Fresh Market, which leverages such an app, was surprised to hear about Amazon Go since he's testing something similar in-store.
The 60-year-old told SN that he’s been fantasizing about a pain-free checkout experience since he was in college. Last year his stores began testing an app that allows customers to scan items with smartphones, scan a code at checkout and pay with Apple Pay or a credit card.
Holzheu is curious to see how popular Amazon Go will be since use of the app in his stores is limited to about four to six customers per day. He attributes low trial to interest in human interaction.
Meanwhile, Stern said that retailers should be scrutinizing Amazon not just for its latest endeavor but its overall focus on the industry.
“What should have the industry worried is there is this news that came out yesterday and also talk about opening and piloting a drive-thru pick-up center and all the other things they’re doing with Amazon Prime, [Amazon] Fresh and Subscribe and Save, so they have their sights set on food retail,” he said.