With Amazon Go opening its first no-checkout-required store, the reality suddenly hits home. Previously confined to industry expos and speculative articles the new futuristic store format is setting pace for 2017, while shaking up the sleepy competitors.
Physical retail space is a significant cost on a company’s balance sheet, and the arrival of Amazon Go highlights the importance of this channel, only a smarter, more efficient and effective model. Surprisingly, when surveyed by Manhattan Associates, the more digitally-savvy younger demographic of 18-24 surpassed others in social experience and enjoyment of going to a store as being an important element of shopping. This means removing the pain points and enriching the in-store experience while taking advantage of the shoppers’ technical aptitude. Digitalisation of a store in this context can aid with both and Amazon along with other companies are showing us how. In this article we will catch you up on:
- Amazon Go: the technology overview
- Impact & Solution: what does this mean for retail in 2017, and what should I do?
1. What is the beast that is Amazon Go?
Amazon Go is a new kind of app-specific store with no checkout required. That means no lines! The system operates on Just Walk Out Technology, with the following mechanics. Shoppers are expected to load an Amazon Go-specific app and then tap their device to a sensor on a gateless turnstile. While they shop the technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart.
According to Amazon this is achieved via:
- Computer vision. In the store cameras are used to visually identify products, whether they have been removed from the shelf and track motion of the shoppers. The patent filing notes “facial recognition” and user information, which may include images of the user, details about the user like height and weight, user biometrics, a username and password, even user purchase history, e.t.c., all adding to Amazon’s data bank. The mention leads us to believe that this could be an opt-in experience.
- Sensor Fusion simply means a use of a combination of cameras and sensors to increase the accuracy and hence the reliability of the results. These could include Bluetooth beacons and WIFI access points that deliver indoor location data of the shoppers and products. Such sensors do not simply refine the product recognition but marry up with the in-store analytics to provide invaluable real-time consumer and staff behavioural data that informs the retail experience strategy.
- Deep Learning algorithms. With the help of AI (Artificial Intelligence) the system could use a shopper’s past purchase history to help identify an item when it’s picked up, if the inventory management system cannot determine the item.
When customers exit the store through a “transition area,” the system senses that they’re leaving, adds up the items and charges their Amazon Prime account. Simples.
2. Impact and Solution
The omnichannel giant is doing what it knows best – using technology to alleviate shoppers’ pain points. Amazon has been heavily investing in customer experience from its website to mobile to the physical book stores (showrooms) and now bricks-and-mortar food retail. Most hurried retail players are no longer plunged into stupefaction by the word “mobile”; that frontier has been conquered. So what should they focus on now?
Time: how to stop wasting it
The more innovative stores now reward customer with time as currency by offering faster checkouts, whether these be mobile-checkouts, the ubiquitous self-checkouts and now Amazon’s completely checkout-less stores. Furthermore, such strategy frees up the staff to be true “brand ambassadors” and enhance the shoppers’ experience by providing advice and guidance on the offerings. Deciding to go full Minority Report? Why not supplement your staff with the telepresence robots! These are essentially videoconference screens on wheels, as seen at the latest NRF show. The roving gadgets can show you around the store as well as advise on products, however, we might need a little convincing.
An alternative bot-less approach to indoor navigation could be the implementation of Bluetooth beacons communicating directly with your customers’ smartphones guiding them around the store to their points of interest, without an ordeal of searching for an available and knowledgeable staff member. Sounds pretty simple, right? It is. Pointr already does this at King’s Cross, Harrods, Gatwick Airport and for other clients.
Store layout improvement: I don’t have an app, do I need one?
With a plethora of digital solutions, it is easy to forget that technology doesn’t work in a silo and the physical store layout is key to a smooth flow of inventory and customers. Shopping with a VR headset is not going to fix poorly formatted stores. Where technology can help is to provide real-time feedback on the effectiveness of the current layout. While RFID tags and lasers can pretty accurately monitor people’s movement in and out of the door, their application is somewhat restricted. There is a future in optic monitoring via cameras but that too has its limitations not mentioning the hefty cost.
We aim to make the monitoring of people’s and products’ movement patterns (as well as repeat visits, dwell time, and more) straightforward, accurate and cost effective. No app needed! Our App-Free Analytics will provide you with user density information to highlight retail hotspots, will allow to track people/assets in real-time and historically simulate their journey. Mapped against the product sales data, the movement tracking information is helpful in informing the most effective store set up.
Personalisation: I have an app and a loyalty scheme, is that enough?
Being truly omnichannel means having a single view of the customer across your entire ecosystem. This entails gathering exceptional data and running complex analytics that will not only ensure an improved knowledge of the customer but will allow to communicate personalised offerings. This is likely to reflect in an increased investment in Business Intelligence across the industry in the coming years.
This is where your app comes in. Supplementing such learnings with customer’s real-time location would allow for the push of personalised, current offers and contextual messaging directly to the user’s phone, improving the shopping experience and increasing sales. Two of the largest supermarket chains in UK are already implementing this technology. Drop us a line if this sounds interesting.
The important take away from the latest industry shake up is that the retail space is not going anywhere but gradually changing in its nature to keep up with the increasingly demanding consumer. The stores remain to be product showrooms and a physical touch point with the customer, thus retailers have to choose the right technology to enrich these aspects and reduce the deterrents shoppers currently face.
Pointr is already powering several multinational retailers’ digital strategies across Europe, Middle East and Asia, providing user and asset positioning, contextual engagement and analytics. Please get in touch if you would like to find out more.