What is Amazon Go?
We’ve all heard the news. Amazon Go will up-end the convenience store through its technology sophistication. Amazon created a new type of shopping technology that eliminates the checkout line. With its Just Walk Out Shopping experience, shoppers can use the Amazon Go app to enter the store, grab the products they desire, and go. Amazon Go is a 1,800 square foot ready-prepared food store, complete with a variety of chef-created Amazon Meal Kits that focus on convenience, speed, and taste.
Kantar Retail’s Take:
Amazon’s continued push into the consumables space is undeniable. The retailer both acknowledges the importance of physical presence to grocery and is investing heavily to determine how it can use its technology expertise to carve a distinct value proposition. With a size of prize close to USD 480 billion in 2016 supermarket and convenience store sales, Amazon knows that to become the retailer they wish to be, they have to unlock the key to grocery. Amazon Go, along with Prime Now, Prime Pantry and Amazon Fresh are all part of management's plan to add their variety of grocery shopping platforms to the shopper’s share of stomach.
Looking forward, we’ll continue to watch and assess these key questions:
- Will these stores also serve as click-and-collect locations? Given the distinct skill sets involved with running small stores, particularly with the chef-prepared fresh options, it’s an open question as to whether Amazon will be able to (or want to) scale this format to thousands of stores. More likely, we see this initial location as technology testing before these sites evolve to become click-and-collect pickup spots. Such a move would fit with other investments Amazon has made this year toward building out an end-to-end fulfillment network.
- How will the Prime membership connect into its physical formats? So far with Amazon Books and now with Amazon Go, the retailer has not given Prime members a distinct experience or status. The retailer has yet to determine what, if any, the Prime membership means in its expanding physical presence. As its footprint develops we anticipate Prime will also carve a greater role. For instance, a future iteration of this Go format might connect to AmazonFresh grocery pickup locations.
- How long until this type of technology is widespread? After proving out the concept in test location(s), Amazon will have a technology that it could potentially sell to other companies. However, the more likely scenario is that a third-party technology company will introduce similar capabilities to help brick-and-mortar competitors’ offer their own no-checkout experience.
This announcement underscores that expanding grocery is a rising focus for Amazon. At Kantar Retail we continue to track the strategic shifts and shopper reception across Amazon’s key platforms. Contact us to understand how we can help your organization maximize your opportunity with Amazon.
Also, KRIQ subscribers may click below to see related coverage: