As part of The Drum’s deep dive into e-commerce, we asked the e-commerce giant if freezing its rollout of “frictionless” brick-and-mortar retail means a little friction isn’t a bad thing.
The Sunday Times revealed last month that Amazon was suspending the rollout of cashierless Amazon Fresh stores in the UK. While it will reportedly continue to open new stores that have completed leases, it is halting plans to find new locations and canceling dozens of openings, citing “disappointing sales and a bleak economic outlook,” according to The Times.
The move has experts wondering what’s next for the groundbreaking technology that Amazon has been touting for the past six years.
As the name suggests, Just Walk Out enables customers to collect what they need and walk straight out of the store without going through any kind of checkout process or even interacting with other people. It incorporates artificial intelligence (AI), machine learning, computer vision, ceiling cameras and weight sensors on the shelves to track what has been removed from the shelf and placed into a customer’s “virtual shopping cart” (essentially the equivalent of your online shopping car) items. Place an order on Amazon.com) and then take it out of the store via waist-height sensors that protect the exit and essentially act as automated cashiers.
Amazon first implemented the technology in its Amazon Go store, which first opened in Seattle in late 2016. Amazon Go customers download an app that they scan before entering, which aids the cashierless payment process, and the technology has since been used in Amazon Fresh stores and some offshoots of Whole Foods Market, which Amazon acquired in 2017 mechanism.
In 2020, Amazon developed a licensed version of the technology, which will be outsourced and sold to independent retailers. For the first time, small grocery stores can apply Amazon’s cashierless shopping model to their own spaces, with the idea that customers will flock to stores that offer a more “frictionless” experience.
Instead of scanning the app, customers entering an independent grocery store with Just Walk Out will need to scan their credit card at the turnstile, which will then display the text: “Just Walk Out Technology by Amazon.” Other than that, Amazon isn’t promoting its own brand — the look and feel of the store remains largely the same.
“We believe many shoppers are more likely to choose to shop in-store when the experience is quick, easy and convenient, and we know our technology can make it easier for retailers,” the company said in a recent blog post. “By using our technology in their stores, retailers can also help their employees spend more time assisting shoppers, answering questions, helping shoppers find items and replenishing shelves as needed, rather than checking out.”
This sounds like a reasonable enough idea. After all, the popularity of self-checkout machines arguably shows that people prefer to interact with cashiers in the flesh. Why not get rid of the checkout process entirely?
On top of that, Amazon has clearly proven (at least in the realm of online shopping) that the easier the better, the fewer steps required in the checkout process, and (it seems) people will keep coming back.
So why has growth in the UK stalled recently? Is it possible that Just Walk Out – as impressive as it is – missed the target somehow?
Too much innovation, too fast?
Brooks Bell CEO Gregory Ng said Amazon may be making the offline shopping experience too easy for customers. “The reality is that a lot of people are not ready for this,” he said. “There will be a need for increased education and comfort to be able to actually get out the door. Amazon may be leading the way, there is a huge learning gap and adoption gap, but the average consumer is not yet close to mass adoption.”
In other words, while the concept behind Just Walk Out may appear to be a successful idea on the surface, the reality is that many people may find the experience uncomfortable and therefore tend to avoid it in favor of interacting with the cashier (or at least interact with some sort of formal checkout process, even if it’s automatic). The point, says Ng, is that many people today seem to prefer to go through a distinct transition phase at the end of the shopping experience, where on the other hand they can be told that the experience is complete and they can move along the
Without such a clear transition phase — some sort of signal that marks the end of the shopping experience — customers are likely to think, “Wait a minute, I don’t have to take out my wallet? You’re not going to stop me from looking at my receipt,” Ng said. Do I just literally walk out? Feels like I’m shoplifting…” Actually, the consumer needs some kind of physical door to get through where the light turns green or some kind of button to say” I’m done shopping”, along with a message saying ‘you’ can go now’.
It might take some extra time, but maybe having the cashier hand you your luggage or even having the automatic checkout machine spit out the receipt at you and tell you in a mechanical voice “shopping with us again soon” is better than simply walking out Even better. In the future, Amazon might use a fleet of humanoid robots to stand at the exit of a cashierless store and tell customers as they leave: “You’re done shopping now — have a great day.” , which sounds a bit like Black Mirror, but oddly, it might make a lot of people feel more comfortable going out with their groceries.
Requires a clearly defined identity
Steve Mader, global head of commercial at UK agency PHD, said the cold reception at Amazon Fresh stores across the UK boiled down, at least in part, to issues of identity and value proposition.
“[The stores are] Not entirely sure what they are,” he said. “They’re not a full grocery store like Sainsbury’s or Tesco…it’s trying to do too much. It’s either a small local grocery store or a pre-made sandwich shop, but neither is necessarily doing very well…the store’s value props haven’t quite come to fruition. “
In the future, how can Amazon rethink its brick-and-mortar, cashierless retail experience to attract more customers and create a more enjoyable and sustainable business model?
Mader suggested that one solution might lie in devoting more resources and attention to the shopping environment itself. “In order to stand out in the market, [Amazon has] Store-centric, value prop-centric, and focus on the store environment,” he said. “Because aside from the initial ‘wow’ factor [that comes from using Just Walk Out technology], shoppers won’t walk into an Amazon Go store and choose that store at Tesco across the street because they’ll save 5 seconds in and out if the value proposition isn’t good enough. It must first focus on being a great grocery store… [and] Make sure shoppers actually enjoy going to the store and not just using technology. “
For more on the evolution of e-commerce, check out The Drum’s latest Deep Dive.