Amazon previously announced they are entering the grocery market. Last week they showed us they plan to change the game on how we shop entirely.
The announcement came with the release of this mind-blowing sizzle reel previewing their upcoming Amazon Go stores which will allow consumers to grab-and-go with new products as if they were shopping in their own pantry.
No Lines. No Cash. No Chip-Reader (yay!).
The customer process is simple. Shoppers must have the Amazon Go app on their phone, update their credit or bank account information, check in at the front of the store upon entrance, and are free to shop as they please. Payment for items taken will be automatically processed following the visit.
It’s the Uber of…. Well, you get it.
It is still unclear just how accurate this new system will be or exactly what technology Amazon will be relying on to link items taken from the shelf back to each individual. Only one thing is for sure;
Shoppers will be lining up to experience the next generation of brick and mortar retail.
The Real Story: Amazon Wants More Data…All of it!
If you think the headline here is about Amazon providing consumers with a better in-store shopping experience, you need to wake up and smell the disruption.
Amazon is creating the first true omni-channel retail experience with full online-to-offline customer visibility.
Amazon is not a retail company and they are certainly not a grocery company. They are a data and logistics company. Now they are looking to capture one of the most valuable and virtually untapped data sets in existence;
What consumers do in the physical environment and how it ties back to their online behavior.
Why would Amazon want to enter the dying brick and mortar market if they dominate online?
People often confuse the growth of online commerce with the death of offline commerce. There are inherent sensory and tactile aspects of physical shopping that cannot be replicated or replaced online.
Roughly 90% of consumer dollars are still spent in the physical environment. As a point of reference, Walmart did $482 billion in revenue in 2015. That is more than Amazon, Google, Microsoft, Facebook, Netflix and Oracle…COMBINED!
While physical retail certainly presents new challenges that online does not, that’s a whole lot of data up for grabs, and we know how Amazon feels about data….
Amazon spent years determining how they were going to move from online to offline. It only makes sense that they would do it in a way that mirrors their online business model. They know what we buy, which items we searched for and didn’t purchase, and our likelihood to purchase related products even before we know what they are.
Contrast this with brick and mortar retail, which generally operates in a vacuum as it pertains to who their shoppers are and how they behave in their stores and the difference is seismic.
That is not how Amazon operates online and they certainly aren’t going to do it in physical retail. They plan to use the same playbook they did online; know everything about every customer you serve and provide them with a personalized tailored experience.