Amazon Go Means Goodbye Status Quo

After visiting Amazon’s first Amazon Go store this past May, and after seeing the recent reports of Go stores coming to Chicago and San Francisco, and the possibility of another larger Go store in Seattle, too, one thing is quite clear: Goodbye, status quo.

Amazon Go is quite simply awesome. It is a welcomed consumer experience, and, more importantly, it may just be the first step on the path to a new American retail experience that is no longer just the stuff of science fiction movies.

Here then is a quick five-point assessment of what Amazon Go is today, what it could become, and what it all, when taken together, could portend for the future of retail:

1. Amazon Go Is Urban Millennial Nirvana

The Amazon Go experience in Seattle is 100% friction-free.

It involves only three key steps:

  1. The consumer downloads an app.
  2. He or she scans the app’s QR code on a boarding-an-airplane-like device upon entry.
  3. He or she then walks into the store and takes whatever he or she wants without talking to anyone.
  4. For anyone who has ever endured a convenience store experience in New York, Chicago or San Francisco, this three-step process is a much desired improvement over waiting in often crowded lines.

    Moreover, Amazon Go’s aesthetic design is pleasing and inviting, and its assortment is also wonderfully tailored to Millennials, with the likes of banh mi sandwiches and Amazon’s own private label gourmet chocolate (the latter of which I tried to hide in my suit jacket to fool Amazon’s visual recognition technology, but, alas, Amazon figured out my clumsy ruse).

    The best way to sum up the experience is that if you asked Whole Foods to mate with a convenience store, and then asked a 2002 pre-Oprah’s couch Minority Report Tom Cruise to play the role of a helpful door greeter, the resulting offspring would be Amazon Go.

    It is the stuff the future is made of.

    2. Millennial Nirvana Is About To Become Suburban Yuppie Nirvana, Too

    Gene-splicing Whole Foods with a convenience store experience is one thing, but the possibility of cross-pollinating Amazon and Whole Foods is another feat entirely. Read between the lines of the recent Seattle store report, and there is one very important note: The next Amazon Go store will be even bigger.

    The initial Amazon Go store was roughly only 1,800 square feet. GeekWire reports that the next Seattle store will be about 70% larger, roughly 3,000 square feet. While the second planned Seattle store also looks to be in an urban location, it is reasonable to conjecture that Amazon Go may be getting larger at this planned site to inform further testing down the road (e.g. suburban versus urban applicability and also additional category applicability).

    The tell is perishables. If Amazon experiments with perishables within any of its additional locations in the coming year, cancel Christmas.

    Right now, the current Amazon Go experience is mostly prepackaged product, i.e. product that is easily identified via Amazon’s visual recognition technology. The only differentiating leg on which to stand that urban convenience stores and grocery stores have against Amazon Go right now are fresh fruits, meats and vegetables. If Amazon begins testing a consumer-first experience in any of these categories soon, the world could get topsy-turvy real quick.

    It would mean Amazon may be close to figuring out how to merge Amazon Go with Whole Foods and that the days of mom having to placate three-year-old Jimmy while she waits patiently for the grocery cashier to ring up her purchases might soon be over.

    Moms everywhere would sign up for a placate Jimmy-free experience in a heartbeat.

    3. An Amazon Go/Whole Foods Marriage Will Take Us To The Next Level Of Retail Innovation—The Personalized Physical Store

    Retail innovation cycles every 30 to 40 years like clockwork. Jeff Bezos was on the cutting edge of last great innovation: e-commerce. Based on the historical trajectory, the next innovation is due sometime between 2020 and 2030. Like Sears with its catalog and later its department store sprawl, Bezos too may be about to pull the feat off for the second time.

    Impressive.

    A checkout-free, fully operating grocery store is phenomenal, but even more breathtaking is the first personalized physical store, i.e. a physical experience that is different from one individual to the next, likely in this case via Amazon’s mobile applications.

    Think of it like a multi-player video game. A customer enters a store like the main player character in the game, and then via his or her voice, physical movement or interactions with a mobile phone, he or she begins to unlock experiences within a physical space that are 100% unique to him or her.

    Experiences like the deal fever of online shopping or live-streaming can then be unlocked real time within the store, and legacy players, who still have to assign payroll weeks in advance to change physical price signs, will have no idea what hit them.

    Reports this week of Amazon merging Prime Day in store at Whole Foods is a harbinger of this eventual reality.

    4. Once Amazon Hits On The Formula It Can Go As Fast As It Wants

    Here’s some simple math:

    Now, before anyone gets upset with the numbers, they are meant to be outrageous and are total baloney and for illustrative purposes only. But, if you get the punchline to the joke, what’s crazy is that the cost of what is likely expensive technology right now will only go down over time, too.

    Amazon has more than enough runway and consumer stickiness to figure out how to pay for more Amazon Go stores far down the road, much to the likely chagrin of its competition, which brings us to the final point.

    5. The Competition’s Backs Are Up Against A Wall With Few Remaining Options

    If the above holds true, retailers will have almost no shot to do anything about it competitively. Some big guys might—the likes of Walmart, Kroger and a few others—but mostly the situation will prove too complicated for existing retailers to rewire their systems on the timelines required to meet the experience benchmarks Amazon will have set already, especially considering many of them have not even started their own experimentation yet.

    The albatross around their necks of technical, architectural, cultural and generational consumer debt will be too much for them to overcome. History could even repeat itself. Just as in the early days of e-commerce, when retailers leveraged Amazon’s platform for their digital experiences, legacy bricks-and-mortar retailers may have no choice but to leverage Amazon’s future “Go” platform for their own in-store experiences as well.

    Who wins in this world? The consumer sure does.

    Who loses? Anyone who still does not see this eventual fork in the road and who does not immediately start reimagining their operations fresh from the ground up or greenfield from where they are today.

    It will take Amazon time to learn physical retail, especially at 100,000 square feet, and so further experimentation must begin as soon as possible. Retailers must begin to spend more on R&D and to take a page from the concept car ethos of the auto industry. They must begin to find their experience design North Stars and to molt these ideas into their existing stores bases over time, like snakes shed their skins, whether they’re under their current brand umbrellas or not.

    It is their only hope for survival. Otherwise they, like the status quo, will soon go the way of the dodo.

    Nice work, Amazon. You deserve nothing but accolades on this one.

    If you enjoyed this post, be sure to check out my blog Omni Talk and my YouTube page for even more great humor and insight.

    Article from Forbes