Retail Trends

Does Amazon’s checkout-free shopping threaten traditional retailing?

The answer to the headline is clearly ‘no’  — at least not initially. While shopping without having to wait in line or scan your items yourself does sound pretty cool,  checkout-free shopping like the Amazon Go store developed by Amazon faces big barriers to widespread adoption.

Amazon Go, which opens in January 2017, employs  a fancy blend of artificial intelligence, RFID, sensor and machine learning technologies to make the process of buying groceries as frictionless as possible.

This is not Amazon´s first foray into physical stores, having opened its first bookstore last year. These bookstores do more than just attract customers who miss the tactile experience of browsing physical books when buying online.

Amazon also offers members-only discounts to drive up their Amazon Prime membership and uses its physical locations as mini distribution centers for more localized and cost-effective fulfillment.

In fact, Amazon´s entry into the grocery market started back in 2007 with its Amazon Fresh grocery delivery service. With $135bn in revenue, Amazon can afford to take things slow and experiment. It also stands to benefit the most by offering it customers the convenience in an innovative and saavy way.

This store is one of 20 physical grocery stores that Amazon plans to open in the next two years. These will be be used to test out the viability and success of several innovative service concepts. Amazon may choose to build more stores in the future, but so far denies rumors of aggressive growth.

In the case of a quick grocery or dinner run, a frictionless checkout-free experience may be exactly what a customer needs. But does Amazon´s frictionless checkout mean the end of POS?

Of course not.  POS technology like Openbravo´s offers much more than registering what’s in your shopping basket.  Associates can look up availability of items not in store, access detailed product information to make assisted sales, and offer different payment and delivery options.

Technology can be used in a variety of ways to offer customers more options and a better shopping experience, and modern technology platforms offer the flexibility to integrate them as needed.

Italy’s largest supermarket chain, Coop Italia, for instance, has decided to use technology to enhance the customer experience with more interactive food displays designed to advise on health, cost, and cooking parameters.

In many cases, human interaction with the store associate is still an essential element to selling more.  Starbucks, for example, counts on store assistants to provide friendly service and upsell their products at the counter.

The company plans to open 12,000 stores in the next five years around the world, bringing the total to 37,000. It is working on new formats which include selling high-end coffee, partnering with a respected Italian chef to offer new culinary treats, and even opening their own roastery to further cement their place in bean culture.

Amazon Go shows us a future  in which in-store automation makes the shopping experience as frictionless as possible. But it is not the only the future as customers want choices and many prefer a a more traditional in-store experience, one in which technology enhances rather than substitutes human interaction.

It is clear, then,  that the combination  of sophisticated  POS technology and well-trained store associates who are empowered to deliver a superior shopping experience will continue to be a key to the success for physical stores.

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