Opinion: Amazon Go deals blow to food retailers

What if … you could walk into a store, grab what you need and walk back out again? With that simple question, Amazon launched a bomb shell in the supermarket world. Amazon Go is convenience 4.0 and a wake-up call for food retailers. 

Store experience transformed

Is Amazon Go the embodiment of the supermarket of the future? Based on the intriguing YouTube video that went viral instantly, Amazon succeeded in finding a solution for one of supermarkets’ most poignant issues: how to speed up and simplify the check-out system. 

And how: quick scan and self-scan technologies suddenly appear hopelessly outdated and QR codes for mobile payments laughably primitive. Yes, this is actual innovation, one that really transforms the shopping experience.

Real innovation from an outsider

Not Walmart, Carrefour, Tesco or Ahold Delhaize (to name but a few companies that have not altered their model for more than fifty years) have come up with the innovation, but Amazon, a technology company that has turned the retail industry upside down in pretty much no time. The Americans will now not only boost payment methods, but also stock management, merchandising and personalization to unseen heights, in a physical store filled with sensors and artificial intelligence. 

Notice how Amazon’s technologies are very similar to those in the self-driving car, which is very interesting because the actual innovation in the automotive industry also came from outsiders, like Google and Tesla. Are we seeing a new “law of innovation” here?

Amazon is not an online retailer (anymore)

Better yet: eCommerce no longer exists, it simply transformed into commerce. The new goal is to “treat the customer the way he wants to be treated, anywhere, any way, anyhow”. This is why Amazon is constructing physical convenience stores that guarantee an actual seamless shopping experience. The company undoubtedly understands that to meet a consumer’s immediate needs, there is no better way than a brick-and-mortar store, close to the customer. You cannot meet convenience online, but you can drastically improve a convenience store and in that regard, Amazon Go is therefore convience 4.0.

Several analysts predict that sooner or later (and probably sooner) Amazon will buy a major supermarket chain, paving the way for total domination in the industry. However, its offline endeavours do not mean it no longer works on online solutions for FMCG. Tools like the Amazon Dash order button target other shopping moments. In any case, it does not seem Amazon’s hegemony will end soon.

Wake up

The American press sees only one thing in Amazon Go: a “job killer”. Just like in every other industry, automation kills off low-skilled jobs and the retail industry is no exception. However, Amazon Go is mostly a wake-up call for every major food retailer: Amazon does what they do not, to innovate drastically. The supermarket’s business model is faltering, but that has only prompted supermarket chains to half-hearted measures: cut costs through self-scanning options, add a touch of experience with a sushi booth and develop its eCommerce because it has no other option than to do so. The entire industry seems reluctant, like it is afraid to let go of the brake. 

Now that a technology giant is on the move, classic food retailers will need to act fast unless they want to go down the path where record labels and video rental stores are found. Nobody knows how time is left for them to act, but one thing cannot be ignored: we ain’t seen nothin’ yet…