Last month, the world’s leading e-commerce giant unveiled its latest splashy PR announcement about an innovative retail concept called Amazon Go, a grocery convenience store that removes “checkout” from the in-store experience.
According to the promo video, Amazon will combine a mobile app with “computer vision, sensor fusion, and deep learning” in order to execute on the seamless “Just Walk Out” customer experience, but the concept is not as novel as it sounds. Retailers have been inching towards the same endgame with self-checkout machines in recent years, and Amazon’s promo has already been mocked by one French retailer who claims to have unveiled a similar “Just Walk Out” experience over 10 years ago (using a simple loyalty card).
Regardless of how or when the Amazon Go concept surfaces in reality, the announcement has undoubtedly put pressure on retailers to rethink what in-store CX innovation may look like in the years ahead, and there are several lessons that can be learned from the ensuing discussion.
AUTOMATION AS AN OPPORTUNITY TO RE-INVEST IN STORE ASSOCIATES
Given the prominent cultural debate around jobs and automation, it’s not surprising that the immediate reaction to Amazon Go was a chorus of headlines about the dystopian future of human-less stores. But these sensational articles downplay the more likely, and strategically sound, scenario — that such automated technology will free up in-store employees to focus on value-added, service-oriented roles.
Early examples of these efforts can be seen in the success of Sephora’s beauty specialists, Best Buy’s Geek Squad, or Apple’s Genius Bar, all of which give customers a compelling reason to visit the store versus merely shopping online. The competitive opportunity around automation technology is not only to cut costs or provide a more seamless customer experience, but also to re-invest in human capital who can play a bigger role in improving and differentiating the in-store experience.
‘SMART’ RETAIL ENVIRONMENTS IMPROVE THE SHOPPING EXPERIENCE BEYOND CHECKOUT
It makes sense that Amazon would use its technological might to first tackle the “checkout problem,” an existing pain point that notoriously plagues visits to supermarkets and retail stores during after-work rush hours. But even more important than frictionless checkout is the potential that technologically “wired” stores have to improve the in-store shopping journey in ways that haven’t yet been imagined.
The same machine learning technology that powers Amazon Go can (and likely will) be utilized to continually monitor, analyze, and optimize the in-store experience based on real-time customer shopping habits. Industry analysts are already discussing the potential for this predictive technology to inform decisions around product inventory, store design, personalized in-app deals, and more. Forward-thinking retailers will be sure to begin plotting out how their own customer intelligence efforts can better keep pace with this technological evolution.
CUSTOMER-CENTRICITY CONTINUES TO BE THE BEST COMPASS FOR INNOVATION
It’s no coincidence that arguably the most customer-centric company on the planet continues to outperform and disrupt new markets. According to industry surveys, over 90% of brands now compete primarily on the basis of CX, and 81% of customer-centric brands continually outperform their competition. Amazon’s relentless focus on the customer is echoed in its roll-out strategy for Amazon Go, which will first be tested in a Seattle concept store amongst brand advocates and employees, allowing the company to learn and optimize the Go experience before a broader public roll-out.
Very few, if any, brands can compete directly with Amazon’s technological expertise, but employing a similar customer-centric approach can help retailers identify their own best opportunities for in-store differentiation and improvement. Nearly 75 percent of companies are now using online communities to act as pseudo “concept store” environments (like Amazon Go). These spheres of engagement enable brands to leverage their most valuable asset — their customers — and investigate ideas for innovation around product discovery, features, purchase journey, loyalty, and more.
Fostering these unfiltered dialogues directly with your customer base is a cost-effective way for retailers of all sizes to better anticipate consumer trends and exploit market opportunities. Open dialogue enables brands to more accurately assess their strengths and weaknesses, and uncover which kinds of value-added roles in-store employees can potentially play. Most importantly, these conversations can help prioritize which innovative ideas to focus on first, in order to most effectively defend against competition, before Amazon moves in next door.
