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How Amazon Go Grocery Stores Might Impact Merchants

How Amazon Go Grocery Stores Might Impact MerchantsThe Amazon Go grocery store is a revolutionary concept. On the outside, it looks like any other brick-and-mortar supermarket; but inside, you’ll notice a number of key differences: 

  • To enter Amazon’s grocery store, you must scan your smartphone at a dedicated turnstile by the front door. This scanning instantly logs you into the Amazon Go app installed on your mobile device. 
  • Thereafter, simply walk through the aisles, selecting whatever food items you want. Your phone automatically detects whenever you add a new product to your basket. The Amazon Go app also knows when you put an item back on the shelf. 

Here’s the biggest difference, though. When you’re done shopping, you just leave. 

  • There’s no waiting in line. 
  • There’s no scanning. 
  • There’s no checkout. 

The entire order is processed automatically, which is why the tagline for Amazon Go is aptly named “No lines, no checkout – just grab and go.” 

Once the order is complete, an electronic receipt is sent directly to your Amazon Go account, smartphone and email address. 

Amazon Go As a Disruptive — but Inevitable — Technology

The Amazon Go grocery store may be a relatively new phenomenon. Yet when you understand the evolution of American retail over the past few decades, a business model like this was all but inevitable. 

It began with the rise of Internet shopping. Users instantly embraced the speed and convenience of e-commerce — but shopping online always had two major downsides: 

  1. Customers can’t touch or sample products in advance. The term caveat emptor (“buyer beware”) was practically created for the Internet Age. 
  1. Customers must wait for delivery. Even with an Amazon Prime account, the soonest any item will arrive is the following business day. This makes last-minute shopping for tonight’s dinner impossible. 

Amazon Go changes all this by leveraging the best of both online and physical retail shopping. You can see and touch what you’re going to buy — while still benefiting from Amazon’s unbeatable prices and variety. Plus, you can walk out with the food you want — without any delays whatsoever. 

Amazon is also taking advantage of mobile technology — another major step in retail’s evolution. Wallets, cash and cards are becoming increasingly outdated in an age where smartphones can offer unparalleled speed and convenience. What’s more, unlike with these older forms of payment, most Americans have their mobile devices on them — at all times. 

The final piece of this inevitable and disruptive business model is automation. 

Many grocery stores already use self-checkout technology, which helps to reduce the need for human employees. Though by using the same deep machine learning that powers self-driving cars, Amazon is able to reduce staffing needs even further. 

A typical Amazon Go grocery store might only need three to six people. Most of those employees will focus on stocking and delivery — until these jobs also become automated. 

What Amazon Go Could Mean for You and Your Customers

The Amazon Go grocery store is still in beta testing, with only a single pilot location in Seattle. However, the long-term implications of this business model are huge — especially if Amazon pursues its rumored plan to launch 2,000 new grocery stores from coast to coast. 

If this pilot project succeeds, it could forever change how we shop. 

As a consumer, this shift is probably great news. That’s because shopping will become even faster and easier. It also helps that Amazon recently bought Whole Foods, making it unlikely that increased convenience will translate to lower-quality ingredients. 

As a merchant, however, the news isn’t as good. As consumer expectations change, retailers will have no choice but to follow Amazon’s lead — and it won’t be for the first time. Remember that Amazon’s success in e-commerce is precisely what forced so many other stores to move their operations online. It’s the same seismic shift again. Yet this time around, you’ll feel pressure to change how you handle orders, process payments and interface with customers — that pressure could be intense. 

Consumers naturally gravitate toward whatever is easiest. Amazon Go’s new shopping experience represents the path of least resistance given that customers can walk in, grab what they want and walk out — without any delays. 

That means, if you don’t upgrade your own stores, you’ll eventually start losing sales. 

In fact, the true damage may be even worse once you factor in all the employees and cashiers who are still on your payroll. In an Amazon Go world, these extra expenses will make it even harder to compete. 

How to Survive As a Retailer If Amazon Go Takes Over

Assuming Amazon Go ultimately succeeds, you’ll have no choice but to adapt to this new business model. Still, if you’re like most merchants, you probably don’t have the resources to invest in: 

  • Smartphone apps 
  • Mobile-enabled turnstiles 
  • Deep machine learning 
  • Automated checkout 

How can you possibly keep pace with the likes of Amazon? On the surface, it seems pretty bleak — but remember that Amazon’s arrival on the e-commerce scene didn’t drive other online stores out of business. If anything, Amazon helped create new demand for e-commerce across the board, and this benefit soon spread to all online retailers. 

Moreover, the e-commerce boom created cottage industries for web designers, programmers and online payment processors. These emerging services helped mom-and-pop stores navigate the transition from the physical world to the online one — without those shops having to learn new skills. 

With that in mind, it’s likely a similar trend will unfold if and when Amazon Go becomes the standard for grocery stores across the nation. 

You may currently lack the resources, hardware and technical savvy to upgrade your store today. Though over time, merchant-side demand will attract innovative providers that can help you make the transition to an Amazon Go-style business. 

To find out what new payment initiatives we’ve already started to develop here at BluePay, contact us today for a free consultation.

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Topics: Mobile Payments, Payment Technology, Fun Posts, Payment Trends

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