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Potential Problems for Amazon Go, and Other Sellers Skipping Lines

by | Dec 12, 2016 | Omni-Channel | 0 comments

Retailers all across the globe have been grappling with the issue of improving the customer experience in the fullest sense of the term. A serpentine line leading up to the register, especially during the holiday season, can be a deterrent to great customer experience. Merchants have known about this problem for a while now. While it’s commonplace for grocery stores and drug stores to address it with self-checkout stations that count items by weight, innovative solutions in other retail sectors haven’t been embraced too widely. Some retailers definitely are trying to address the line problem, though.

Several years ago, Nordstrom, among other sellers, embraced mobile POS (usually accomplished with a tablet) to disperse lines, resulting in a 15% sales gainApple launched an Apple Store app to enable people to pay at the company store without the interference of register or a clerk. Most recently, Rebecca Minkoff has partnered with a technology called QueueHop, which unlocks a product’s anti-theft tag after a payment is made via an app. While all of these solutions are more convenient for shoppers (and thus more lucrative for sellers) than waiting in a regular line, Amazon has just gone above and beyond with a new concept it’s calling Amazon Go.

 

Introducing Amazon Go

 Rather than even making shoppers manually scan items themselves, Amazon Go operates on a promise of “Just Walk Out.” In other words, there are no registers, and there is no checkout. Shoppers now can go to the store, take what they want into the cart and leave the store. Items in the cart will be billed to their Amazon.com account. As most details are not disclosed, it’s a little hazy. But it is believed that Amazon Go will make use of computer vision — the kind of technology that allows to see what people are looking at and what they’re picking up, sensor and machine learning technologies. Note here that these are the technologies that are found in self-driving cars. Now, let’s see how exactly Amazon Go will work.

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How Amazon Go Works

First, people will have to open the Amazon Go app and place it to a sensor located in the entrance way.  The technology will automatically detect the items that customer has selected in his cart as well as the items that he has put back on the shelves. It will be done by the virtual cart, which is installed in the app. When a customer is done with shopping, he can ignore the need of going to the cash counter. He can simply walk out of the store as the bill will be charged to his Amazon account. He will get the receipt as well.

Clearly, Amazon Go is an effort to differentiate in-store experiences on a whole new level, but a few other things may have prompted its launch. t’s obvious that Amazon is trying to expand its hold over a brick and mortar segment. The decision of opening more bookstores is a hint towards that effort. Naturally, it wants to smooth the in-store customer experience. The innovation in the Amazon Go grocery store may pave the way for it. Besides, for grocery products, it’s an open fact that people want to go to the store to examine what they’re buying and ensure the freshness and quality of their purchases. Not to forget that maintaining the inventory of such products is a dreadful task as they are perishable. While online grocery shopping via Amazon Fresh, Wal-Mart, Instacart, and local stores is a viable market, shoppers aren’t nearly as open to it as they are to purchasing other items online.

grocery delivery

Selling perishables online can be a tricky business, which is why Amazon’s move into brick and mortar makes sense from several angles.

Making online grocery is also much harder than delivering books or phones. That’s why it is believed that Amazon may open 100 such grocery stores in 2017. It’s a no-brainer to guess that stores can’t last long if their customer service leg is injured.

The last, and perhaps the most important, point is this app is capturing the live shelf activity of the customers. Now, it will allow Amazon to track people, and thus, their data. But this data can be used for many other purposes apart from targeting customers to get the upsell. The collected data on how customers move within a store and what they buy can help Amazon in guessing purchasing trends, deciding how to rearrange a layout, and creating better reports for its shareholders. That’s why data gathering has always been in the company’s interest.  

Read on below…

Other Resources

Potential Problems

Having said that, there may be some cracks which may appear while implanting this path-breaking app. It’s a possibility that Amazon may mistakenly charge a customer for something he/she didn’t buy. Considering the mistakes that pop up from time to time in their well-honed e-commerce operations, this seems probable. When it happens, it’ll certainly cause outrage. 

What can complicate the matters further for the Amazon Go system is the fact that grocery shoppers often put things back in the wrong aisle. Also, there are certain items, like vegetables, which are priced by weight. These may be harder to track. Similarly, if a family comes to shop in the store, it should get one dedicated virtual cart. Otherwise, they will be charged individually based on the smartphone in their pocket. Of course, theft–whether accidental or purposeful–will also be a concern.

While Amazon Go’s enhanced technology will provide many safeguards to this problem, studies have shown that “traditional” self-checkout usually increases shrinkage. A report from this summer used data from almost 12 million shopping trips to determine that self-checkout raises the rate of loss by an average of 22%. The study also showed that consumers who are generally honest and not inclined to steal are much more likely to when they’re interacting with a machine “simply because they can, and do not feel it is as wrong when there is no human interaction.” Furthermore, when self-service tech fails and frustrates shoppers, they feel additional motivations and/or justifications to disregard the law.

Cautious Excitement

Of course, considering the sheer might that Amazon exerts and looking at the technological power that it can buy, there are many reasons to believe that they’re uniquely placed to tackle these issues. While Amazon Go is a novel concept that’s set to debut elsewhere in 2017, we won’t be that surprised if there are a few missteps along the way.

Considering how important Amazon is for the future of the retail industry, we always keep a watch on its activity. Go through this blog to know how Amazon banned incentivized reviews. Prior to that, Amazon had punished fake reviews too. We have talked in depth about that in this blog.

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