Have you guys heard about Amazon’s new brick and mortar store? Known as Amazon Go, the store officially opened in Seattle. What’s amazing about this store, is that it rages against the norm, by getting rid of traditional cash registers. To go on a bit of a rant for a moment, cash registers are one of the biggest problems that I have with supermarkets. There is a store, near my house, that boasts that all checkout lanes are open on Saturday and Sunday during a certain time of day. Maybe its 9-5 or something like that. Why? Because the lineups are usually hella long.
The second problem that I have with supermarkets is the fact that there is some kind of problem when it comes to scanning the item. Maybe it’s in the wrong place on the shelf, or someone priced it incorrectly, therefore it scans at a higher price than you expect etc. Amazon’s store will help with some of these things. Brendan Witcher, an analyst at Forrester says that it’s not a checkout solution, but rather a fully connected store. He suggests: “This is immersive technology that allows you to continue to shop the way you want to shop but removes a pain point.” And he’s right.
Think about the way that we shop now. In the past, the raison d’etre, for a retail store was simply to sell stuff. Now, however, the retail operations need to figure out how to shift to e-commerce, but at the same time retaining the physical store locations. What happens is that retailers are taking steps to mimic the ease and convenience of online shopping while offering the perks of having an “IRL” experience.
It’s estimated that 85%-90% of all transactions are still taking place in physical retail stores. Even though Amazon is dominating with their online presence, they still see the value in brick and mortar stores. This is seen from their purchase of Whole Foods, having bookstores nationwide, and also this new Go location. Amazon is leading the way when it comes to a futuristic retail experience. It’s probably more realistic to say that they’re creating this futuristic retail experience.
Given that this is the way of the future, what can we expect of other retail stores?
Lack of Inventory
This is probably a weird concept, but stores themselves are moving away from having inventory. Instead, they’re offering services. A Nordstrom store in Los Angeles that opened late last year, has no inventory but offers services like manicures, stylists, and wine. The concept here is to allow the customer to work with a stylist in order to get personalized advice, and then have the items delivered to their home. All of which, I agree with. I hate having to go out and try things on though, so physically leaving my house to have to order something is slightly annoying. Maybe a manicure would make up for it?
Not only are stores closing, but they’re also shrinking in size. It’s interesting that stores no longer need the same footprint that they’ve seen over the last few decades. Take pop-ups for example. These are definitely becoming main stream, and it doesn’t tie a retailer down to one physical location.
This concept might not be as easy to see or understand. But artificial intelligence has been changing the retail industry for a while now through the use of chatbots, and other machine learning platforms. With the development of 3D printing, we are going to be able to get customized, or personalized products while we wait. Nimbly, an on-demand 3D knitting platform can sew garments for a customer while they wait. Kevin Sladek Nimbly’s co-founder wonders if this will cause things like standard sizes to become extinct, for customized sizes. Which would be great, wouldn’t it?
I think this shift will be great in the long run. We (as a society) have to get to a place where we’re ok with these changes and understand that these things aren’t going to replace humans, but rather change the way that we spend money and receive goods. It’s a win-win in my opinion and a lot of this has to do with Amazon.