Grocery retail is the last brick-and-mortar industry to have evaded the digital upheaval of their business model. Over the last few years, the consumer has been witness to completely rethought business models—from how early digital brands like Travelocity and Expedia changed the way we book travel, to the more recent revolutions of Uber and Airbnb. Disparaged and scorned by everyone from media to comedians to industry experts at first, no one knew that these brands would disrupt entire industries.
In comes Amazon Go, joining those companies that quickly went through the phases of zero awareness to skepticism to broad adoption. They are all now taken for granted as a normal part of our commerce and are thriving. Amazon, a technology disrupter in the grocery retail space, is going to have the same success. In a few years, we’ll be complaining about having to stand in line at a register—something that would have seemed impossible to subtract from the retail environment just a few years before.
If Amazon Go is a game-changer in the same mold, then we can expect a lot of changes in the coming years from grocery retails and in-store retail overall. Let’s break down why this model, which skips store checkout lines via a smartphone app, will work.
Amazon can do what Kroger cannot. Amazon and other companies have been trying to disrupt the traditional grocery model for years. The first wave of attempts was around online shopping with delivery—an approach that is now finally seeing some success and struggling to grow rapidly enough to support demand. Plus, traditional grocery retailers are able to easily enter that space and compete with tech companies.
Amazon Go changes the game in the way traditional grocery cannot and promises to disrupt the entire distribution chain from cashiers to stockers to delivery trucks to mystery shoppers. Traditional retailers will avoid pursuing a similar path due to influences like union relationships with employees and outcry over lost jobs. Amazon is free to reinvent grocery retail because they are not beholden to any parts of the traditional structure.
Consumers are primed for innovation. The immediate resistance and skepticism to new category advances isn’t coming from the consumer, it’s coming from the industry “experts” who are too embedded in the existing structure to see what is coming. Consumers love innovation and convenience. Loyalty to your local Piggly Wiggly is out the door if a shopper has a better experience elsewhere.
Every time a category undergoes a revolution in the consumer experience, shoppers’ expectations increase for all retail and buying experiences. Whenever a shopper gets used to a convenience, leaving an Uber without having to exchange money, for example, they begin to find more traditional experiences burdensome.
Shoppers love choice. All shoppers are becoming promiscuous about their brand choices. Faced with massive changes in all categories, new innovations, all products within reach, and more information than they can process, shoppers are now primed to look for the new and better every time they enter a category. Traditional brand loyalty is dead.
Amazon Go is a perfect retail environment for promiscuous shoppers as it allows shoppers to feel freer to explore and consider products without time-consuming lines at checkout. Amazon can also use their algorithms to connect shoppers to brands they otherwise wouldn’t have experienced through push offers to the app or in-store placement. Promiscuous shoppers are also attracted to a feeling of independence and freedom of choice. Even though your grocery store clerk isn’t following you around the store, the concept of being completely unfettered puts the shopper in a new frame of mind than they’ve ever had before in traditional grocery shopping.