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ECommerceTimes.com

Will Amazon Go Reinvent Retail?

By Jeff Kagan
Apr 14, 2017 10:00 AM PT
amazon-go

Every time I walk into a retail store, I complain. I grumble to my wife about the same pet peeve every time we go shopping.

After walking the aisles and filling the basket, you then must go through the most inefficient checkout process. First you unload everything in your basket, then it's rung up, then you put the items in bags that go back into your basket before you can walk out of the store. There must be a better way. Amazon Go suggests there is.

Shouldn't it be easy in today's world, with today's technology, to cut through the mess and reinvent this process? Yes -- and that's what Amazon wants to do with its new retail stores. It wants to reinvent retail the way it reinvented other industries.

Today, Amazon has a few retail bookstores, and it intends to break into other retail sectors. Due to some hiccups, the rollout of the Amazon Go stores seems to be on hold -- but the need is real, and I expect Amazon to figure out the problems and open them sooner rather than later.

Startup Issues

What if you could walk the aisles of a store and put the items you want to purchase in the bags in your basket, and then when you are done, simply walk out the door to your car? Your smartphone app would let you get charged for your purchases automatically. Your items would be scanned as you collected them. The whole process would be easy.

That's the thought, anyway. It seems this should be easy to accomplish with today's technologies, but apparently it's not. Amazon is having some trouble at this early stage. When its stores are ready for prime time, it will be interesting to see whether they can enter the retail arena and transform it the same way it transformed online commerce.

Skipping the Checkout Line

Sam's Club has its own app. The first time I tried it, I got miserable results. I tried to scan a package of batteries and walk out, bypassing the cashier. I couldn't do it. It kept trying to get me to place the order as if I were at home and schedule when to pick the item up later in the day. Since I was standing in Sam's Club, that obviously made no sense.

Confused, I walked up to the customer service counter and asked for help. All I wanted was for someone to explain what I was doing wrong. The staff tried and couldn't figure it out either. I asked several different Sam's Club workers and got the same response -- a blank stare.

I tried again a few days later, and it was a success. The problem with the first attempt was that I was using the wrong app. Apparently, I had installed two Sam's Club apps, and when I used the search command, it chose the wrong one.

So, technology can make or break a company's image in the mind of the customer.

Walmart's Problem and Solution

Walmart is hurting itself by allowing other companies to sell on its Walmart.com website, but not telling its customers that different rules for returns or exchanges might apply. This mistake costs some customers' money and sours their experience, reducing the Walmart brand value in their eyes.

Walmart's problem is not the consequence of a deliberate strategy. The company didn't try to take me for a ride, even though that's what happened. I believe it wanted its additional service to work well. However, when a company tries something new and it goes wrong, it's important to reach out to the customer. Apologize. Make amends. Save the brand's value.

I have heard nothing from Walmart, however, and that's the real Walmart problem.

No matter its size, a retailer must be very careful not to damage its own brand when expanding into new areas the way Walmart has been doing. Walmart has been shooting itself in the foot. If I ever step on someone's toe, I automatically say, "sorry." Walmart should do the same. It hasn't, and that attitude will hurt its brand value in the long term.

All that said, we are seeing a number of players in the retail sector trying to break the mold and come up with a new model. Amazon Go is not the only innovative effort. There are quite a few retailers playing in this space to one extent or another. I like the idea of finding new ways to pay with the smartphone.

Tread Carefully

I like paying with an app and then walking out of a QT or Racetrack gas station. However, there are differences between their approaches

With QT, customers can purchase something without touching the germ-filled keypad. With Racetrack, customers still need to punch buttons on a dirty screen. That's one important reason customers pass Racetrack and go to QT. Little things like this can build or tear down brand value in a customer's mind. That's why I believe all retailers will move to the best, fastest, cleanest and easiest solutions for the customer.

Over time, retailers will learn. All of today's problems will be fixed -- but we are still in the early days. I expect to see this new way of retailing become the norm, when the companies involved finally figure it out.

Amazon is the king of good customer care. It does things right. It goes above and beyond. It exceeds customer expectations most of the time. This is key to growth and success in the long and short term. Walmart and Racetrack should pay more attention to and learn from Amazon, don't you think?

Amazon has reinvented industry after industry, starting with the book store business and expanding to everything else. Not all of its initiatives have been a success -- remember the Fire Phone disaster? Still, Amazon does have a good track record -- and success to Amazon means upending and reinventing industry after industry.


Jeff Kagan has been an ECT News Network columnist since 2010. His focus is on the wireless and telecom industries. He is an independent analyst, consultant and speaker. Email Jeff.


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