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Amazon Go: Checkout to go?

By: IMRG

Amazon Go, the checkout-less store introduced in Seattle in January, looks set to expand. Reports suggest that the online retail giant could be opening six more stores this year. While Seattle and Los Angeles are tipped as the most likely recipients, it’s yet unclear where the new sites will appear.

Amazon did trademark the slogan ‘No Lines. No Checkout. No, seriously’ in the UK, leading to speculation that Amazon Go will be arriving on these shores before long (although there is nothing to suggest a UK-based store will be among the next six rumoured to be in the planning).

It would be very understandable for retailers to look at Amazon’s multichannel expansion as a major disruptive development that could quickly make any store environment that still features a checkout in the traditional sense seem rather inconvenient.

So what does the expansion of Amazon Go mean for retail?

Inside Amazon Go store

The pressure to catch up

Data from the IMRG Online Retail Sales Index shows that, over the past 18 months or so, there has been a general downward growth trend for multichannel retailers, while online-only retailers have tended to fare better.

One theory as to why this is happening relates to perception among shoppers – so while some multichannel retailers can seem traditional through virtue of the fact that they still have a strong high street presence, online-only retailers can by extension feel a bit more ‘buzzy’; crafting relationships with influencers, offering propositions that are a bit different and benefiting from a greater capacity for agility and adaptation to fit changing customer behaviours.

It would be the multichannel retailers who would most obviously feel the impact of Amazon Go and, in the extreme, the arrival and expansion of Amazon’s ‘bricks & clicks’ proposition could be an existential threat. Amazon have often rolled out services that have forced the rest of the industry to try to catch up, but it hasn’t always required an exact imitation (such as their launch of same-day delivery services – not all are able to do this, but in many cases next-day has proven to be sufficient to meet customer satisfaction).

The introduction of checkout-less convenience stores at scale would certainly put pressure on others to make some kind of move in that area, though it may be that quicker checkout experiences through optimising processes, such as offering quicker digital payment methods, may actually prove to be ok for many shoppers (for the immediate future, at least).

We also asked IMRG members what they thought the introduction of Amazon Go might mean for the industry.

Outside Amazon Go store

Ciarán Bollard, CEO, Kooomo:

The news that Amazon will open six new Amazon Go stores in 2018 certainly highlights how machine learning and AI combining with brick and mortar stores deliver a more frictionless experience to customers. 

Having a store where customers can walk in, pick up what they want and walk out without needing to checkout, is, without doubt, an innovative and exciting development in the retail landscape as we know it. But how about the possible social impact if this new concept is to become the norm? What about checkout staff? What about customer service? Forget about the death of the local store…could this potentially mean the death of the supermarket?  

When it comes to the future of ecommerce, I feel that all digital sales channels need to take a more holistic approach in order to simplify the buying process.  

We believe that brands can offer consumers a frictionless purchasing experience through tried and tested strategies, such as implementing one-page checkout, as well having an omnichannel approach to sales.

The figures speak for themselves - omnichannel shoppers have a 30% higher lifetime value than those who shop using only one channel. Making checkout as easy as possible for customers is a vital part of the overall customer experience, but in order to drive sales, you must optimise all of the touchpoints that lead a customer to make a purchase in the first place.

Amazon is moving fast online and now offline. The greatest competitive advantage that companies can have is software that allows them to organise all of these new processes and shape their capacity to deliver. Many companies miss the software part while they have the product, a committed team, and enough resources to accept the challenge.

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