douglas.bay@vantiv.com

Will "Amazon Go" be the next grocery "Thing"

Blog Post created by douglas.bay@vantiv.com on Dec 15, 2016

What frustrates me about shopping? Having to go to multiple stores to complete my grocery shopping list. We're a family of 5 so we buy the big bulk items at Costco once a month and weekly items at King Soopers. With the news of Amazon GO I'm less impressed by the concepts of walking out with all my goods (saving 7 minutes in a checkout) as opposed to getting the "hands on" things in the store and having the other things delivered when I need them. So simplification or reduction of my weekly grocery shopping would be my "thing". For example, I use Amazon Alexa (What could Grocery-IoT look like?) to build a shopping list of goods. Alexa would be smart enough to know that paper towels, shampoo, diapers, soy sauce, tomato paste, flour, rice, cereal, coffee, cranberry juice etc. are items I really don't need to see or touch in order for me to feel comfortable buying them. However items like fruit, vegetables, flowers, meats, cheeses etc. are items I prefer to see and inspect. Said another way, Amazon has the potential to blur the line between in-store purchase along with online purchase by leveraging technology like Alexa and their Amazon GO store fronts. So for me, if Amazon GO store becomes the place I can get great produce, meats etc., I'll order all of the other boxed stuff online. Plus for the online boxed stuff I can get customer reviews etc. about what people are buying.

 

I feel that Amazon does have another area in which they can make inroads. At work we have an unattended kiosk where we can pick up items, scan them and walk out. Certainly not as complex as the tech Amazon is working on however certainly satisfies a need of speed and convenience in our office. If the Amazon GO stores were to take this up a notch I'd certainly use their store. Possibly partnerships with companies like Blue Apron, Green Chef etc. would be good. So I could go into a Amazon GO store, and pick up 3 packaged meals that I ordered earlier in the day through Green Chef.

 

I've added a few of my own ideas below for discussion. How do you think Amazon GO will change the grocery experience?

 

Challenges or Barriers to entry

  • Real-estate acquisition
  • Theft
  • Accuracy / reliability. If the ISP or server for a store goes down what happens?
  • Stocking of supplies. I actually see big improvements here. As people add to their shopping lists using Alexa, the store can anticipate purchases.
  • Technology cost to deliver solution.
  • Increased supplier costs which likely would be passed down to the shopper.

Partnerships or Natural synergies

  • Hip stores like Trader Joes, Whole Foods etc.
  • Work with meal prep companies like Dine-in Fresh, Blue Apron, Green Chef etc. to provide pickup meals to cook at home. Similar to how Amazon allows merchants to host online store fronts, would they also extend this to thier stores? So say a local yogurt company wants a spot in the Amazon GO store. Not sure about other states however Colorado has a big emphasis on bought locally, non-GMO etc.
  • Autonomous delivery vehicles
  • Large warehouse stores

Who will likely compete with Amazon?

  • Grocery only stores. By moving out boxed item purchases I think grocery stores will take a big hit.
  • Larger warehouse stores like Costco and Sam's club.

What business model does this more closely resemble?

  • IPhone
  • Starbucks
  • Uber

 

Other Blog's of Interest

What could Grocery-IoT look like?

 

Amazon GO References

Will Amazon Eat Grocery Stores For Lunch? | PYMNTS.com

Amazon Go To Grocery Shoppers: “Just Walk Out” | PYMNTS.com

Introducing Amazon Go and the world’s most advanced shopping technology - YouTube

Amazon Go consumer doubt: SURVEY, CHART - Business Insider

Amazon Go Is Proof That Business Partnerships Rarely Work

Outcomes