Fresh Ideas: How Amazon Is Transforming the Grocery Industry
by James P. Outreach & PR ExecutiveSince the
first supermarket was opened in the US in 1930, the industry hasn’t changed
much. Supermarkets are handy places for us to go and pick up what we need, when
we need it, all from one place. It’s fair to say that expectations are limited
when it comes to supermarkets—customers know what’s coming: baskets, shelves,
and checkouts. However, this all changed when Amazon opened its first physical
grocery store location in 2018, Amazon Go.
The move
created shockwaves throughout the grocery industry for one major reason—there
are no checkouts at Amazon Go. In this article, we look at all the latest
grocery innovations Amazon has brought to the table.
Online to onsite
For a
traditionally online retailer, opening a brick and mortar store may seem like a
strange move, but Amazon’s shift into the supermarket industry should not come
as a surprise. Of course, Amazon’s new line of grocery stores does not replicate
the existing shopping experience. Instead, every aspect of the process is
optimized with technology and efficiency in mind.
Amazon
describes its outlets as “a new kind of store with no checkout required”, all
thanks to their innovations. These stores use the same technology that you would find in driverless
cars. Cameras track the movement of customers and products to calculate what
you’ve taken. There’re no checkouts, so just leaving the store with your goods
is your checkout experience. Your Amazon account would then be charged.
For
consumers, the appeal of an instant checkout grocery store offers two main
benefits. First, the experience is more efficient and enjoyable. Second, lower
employee costs can translate into cheaper products. These ideas are priorities
for supermarkets approaching the future of food retail, especially with the
growth of discount marketers like Aldi. In 2019, Aldi had 1,800 stores in the
US, with plans to increase this to 2,500 by 2022. The average Aldi shopping
basket cost is 20 percent less than in Walmart.
Amazon’s
mission to produce high-quality goods at reasonable consumer prices is
ambitious but is already clawing away at the competition. According to one
report, Amazon Go is up to 25 per cent cheaper than its nearest rival,
Kroger-owned QFC. The stiff competition means Amazon is willing to go the extra
mile to dominate this industry.
Competition or a boost for
businesses?
The
expansion of Amazon into the grocery market could be frustrating for their new
competition, but it creates a powerful sentiment: physical shops are not doomed
to be a thing of the past. While it does create additional competition, it also
invigorates the industry and promote in-store shopping over online commerce.
Amazon’s
move has pushed many grocers to offer click and collect options. Plus, the
expansion of self-serve checkouts and scan-as-you-shop devices reflect a new
era of innovation for supermarkets. Most importantly, Amazon’s physical shops
can help alternative and growing businesses.
Amazon Go
stores can be used as fulfilment centers for small businesses that are
registered as sellers on Amazon. This means that customers can pick up their
packages with ease at any of their grocery stores. Furthermore, the physical
locations mean that construction and engineering jobs can be created to build
the new no-checkout stores.
A rapid
expansion along with reinvigorated needs for safe and hygienic shopping
locations means that manufacturing can benefit from Amazon’s expansion. The
growth of factories and fulfilment centers also needs to ensure safety. Safety
and hygiene practices would also need to be considered with the increasing
number of factories and fulfilment centers, with stainless steel electrical
enclosures and cable management systems being an effective solution.
The
contactless nature of Amazon’s grocery stores has come about at the right time
too. In a world where we are becoming increasingly conscious of our
interactions with people, contactless is the way to go.
Your new shopping
assistant
As well as
AI being used to calculate what you’ve bought in an Amazon Go store, the
experience of shop assistance has also been digitized. Amazon’s own Alexa is a
prominent feature of the shopping experience. Units across the store are ready
to give guidance and advice on your shopping needs. The Echo devices with the
enabled voice assistant can guide you to locations in the store and offer
information about their products.
As well as
the virtual assistant, the digitized stores also offer customers the ability to
track their spending. Receipts are automatically emailed and grant customers
access to product information online. The ability to access this information
not only changes how we shop, but potentially how we eat. In the future,
grocers may recommend products based on our dietary choices, and offer
healthier alternatives. While moving into a physical location, Amazon is moving
a conception of shopping to online spaces.
This business
premise is expected to expand globally from 2020. With triumphs throughout the
country, it will likely and continually grow at successive rate here in the USA as well. With
this in mind, it could be expected that these innovations will expand not only into other supermarkets and grocers
but into other retail sectors as well. Hospitality and fashion retail may
benefit from a similar approach to no-service-needed businesses, where products
can be taken, and your account will be automatically charged. Every industry is
changing through technology, and our lives will be wildly different as a
consequence.
Sources
https://edition.cnn.com/interactive/2019/05/business/aldi-walmart-low-food-prices/index.html
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Created on Mar 18th 2021 09:57. Viewed 452 times.
As well as AI being used to calculate what you’ve bought in an Amazon Go store, the experience of shop assistance has also been digitized. Amazon’s own Alexa is a prominent feature of the shopping experience. Units across the store are ready to give guidance and advice on your shopping needs. The Echo devices with the enabled voice assistant can guide you to locations in the store and offer information about their products.
Mar 18th 2021 16:06