Amazon GOes physical...
- Sg632
- Feb 10, 2019
- 3 min read
In regard to online and offline business as important areas of commerce, this blog post aims to show how there are both opportunities and challenges that present themselves when operating with both digital and physical locations, by focusing on Amazon Go stores. As an avid user of Amazon prime it was particularly interesting for me to see how they are evolving from an online platform to physical stores, with their first store opening in 2016. In an evolving digital world the initial news caused confusion to me. When i heard 'physical stores', my thoughts processed only traditional retail experiences and I wondered why such a successful online conglomerate would create a store in a world where the high street retail has been known to struggle (Portas, 2011). However, with research I realised that this store was far from traditional and ‘despite the rise of e-commerce and mobile, the physical channel still plays an important role in consumer experience’ (Cbinsights, 2018), especially with around 83% of retails sales ‘still happening inside physical stores as late as 2012’ (Orendorff, 2018).
So, what is different about Amazon Go?
Unlike traditional retail, Amazon Go has used O2O (online to offline) commerce, by engaging their ‘online customers in various ways to encourage or entice them to leave the digital space and enter a physical one’ (Anon, N/D). Through this they have found their loyal online customer base to help them engage in a physical experience that manages to intertwine them into the digital world.
How Amazon Go has utilised digital technologies...
Firstly, Amazon can not be physically experienced, so Amazon Go offers a whole new customer experience for consumers.
Secondly, the ease of shopping. This comes from not only the removal of cashiers and queues, cutting time off shopping trips, but creates ease through the link with the digital world via the app that provides a QR code that is scanned to enable you entry into the store.
Thirdly, personalisation. This seems a bit odd to have in a store that has quite literally removed the need for a person to do a job, (removal of the cashier), but the Amazon Go stores are in fact set with a personal feel. For example, they use biometrics from the QR code scanned when you walk in, to create a personal greeting. Furthermore, McFarland (2018) explores how the store uses digital technological data and AI (artificial intelligence) to configure what you regularly buy, offering personal recommendations such as "Hey Matt, we know you love to grill, and we know you like steak. We've got a special on ribeyes right now!" (McFarland, 2018) and again using AI to recommend other side dishes to go with.
Moreover, Amazon Go offers opportunities for Amazon to monopolise their business, moving into the physical retail market, and also creates opportunities to widen their consumer market by offering the store to those that may not have an online presence with Amazon. Furthermore, Amazon Go 'reflects the broader industry imperative around “omni-channel” retailing, where merchants aim to provide customers with a seamless experience whether shopping online via desktop or mobile device or at a traditional retail store’ (Walsh, 2016).
Challenges that Amazon Go may face...
Personally, as I categorise myself as a third space thinker, I believe that this is an innovative idea and I understand the importance of using AI to offer a new experience. However, creating a store that essentially follows your every move can generate problems with some people that find the whole concept invasive and would prefer to use Amazon’s online platforms or just traditional stores.
Furthermore, Amazon Go may face challenges with its limitation of product range as it simply sells food, whereas online Amazon offers a variety of products. Another challenge is created with a physical store is that having a physical location means it can only reach those in that specific area, whereas online, Amazon can access people with internet connection anywhere in the world.
Finally, the removal of cashiers, evidently causes some job losses and with '3.5 million Americans making a living as cashiers' (Gershgorn, 2018) this would be a prevalent problem if this type of retail experience became a constant.
Living in such a networked society shows how our connections with both the physical world also intertwine with digital space. Through Amazons giant online platform and the creation of Amazon Go stores they have generated a network of offline and online relationships, that essentially help blur the boundaries between physical and digital entities, while portraying both challenges and opportunities with these locations.
References
Amazon Go Store. (2016). [Video]. Retireved from: https://www.youtube.com/watch?v=NrmMk1Myrxc&t=1s
Amazon Go Seattle. (2016). [Image]. Retrieved from https://commons.wikimedia.org/wiki/File:Amazon_Go_-_Seattle_(20180804111407).jpg
Amazon Go Seattle December. (2016). [Image]. Retrieved from https://commons.wikimedia.org/wiki/File:Amazon_Go_in_Seattle,_December_2016.jpg
Amazon Logo. (2016). [Image]. Retrieved from https://commons.wikimedia.org/wiki/File:Amazon_logo_plain.svg
Anon (N/D). Retrieved from: https://www.bigcommerce.co.uk/ecommerce-answers/o2o-commerce/
Cbinsights. (2018). Retrieved from:
Gershgorn, D. (2018). Retrieved from: https://qz.com/1184978/amazon-gos-ai-powered-grocery-store-is-opening-to-the-public-in-seattle-tomorrow/
McFarland, M. (2018). Retrieved from:
Orendorff, A. (2018). Retrieved from:https://www.shopify.com/enterprise/o2o-online-to-offline-commerce
Portas, M. (2011). An independent review into the future of our high streets. Retrieved from https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/6292/2081646.pdf
Walsh, M. (2016). Retrieved from:
Hi Sarah,
Your topic just got me here !! I personally have to say that I’m a loyal customer of Amazon since I have been buying its products frequently like twice a month. It’s really interesting to know that Amazon goes physical, and it looks more attractive.
However, I still think that there are several drawbacks of Amazon’s physical stores as it tend to be fully digitalised (digital technological data & AI). This might only works with millennials or those who are familiar with the digital world, but how about the elderlies and non-digital people. There are still plenty of them whose not familiar with the advanced technology, and this might prevent them from walking into the stores…
A really interesting angle to look at. I think that the buyer experience enhancement said that is a really interesting area and one that is extremely relevant in today’s modern, technology mad world.
Hi Sarah, really interesting blog on Amazon's retail stores. I think it is interesting to see digital companies who have generally declined the traditional brick and mortar stores, succumbing to it. While Amazon opening up stores is the natural next step, when taking into account your statistic of 83% of retail still happening offline, after further reading I think a large problem is going to arise in terms of privacy concerns. Don Resinger (2017) for Fortune discusses how Amazon Go aims to be a cashier-free store, but with this consumers are tracked with cameras, motion sensors and AI technology. I personally would not like to be constantly tracked while carrying out my weekly grocery store, and I can imagine the…
Hi Sarah, interesting take on Amazon and their physical exploits! Whilst the idea of going in, picking something up and just being charged to your account does seem to have some convenience. One question on my mind comes down the lack of personal in the store. One of the things that comes to my mind when I do my shopping is the general conversation from some staff. It can make for a friendly environment and I personally enjoy that. Do you think there was the demand for these stores with the bare minimum in the way of staff, an impersonal experience?