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Opinion CX Strategy

Amazon Goes Back to the Future

Amazon has jumped into the retail grocery business — and their offering is far from run-of-the-mill. Say bye-bye to check out lines and get ready to just grab and go like it’s your own mega pantry.

Why would Amazon go back to brick and mortar retail?

Was the whole company built on the concept that online shopping was the future and brick and mortar was the past? To the credit of Jeff Bezos and his executive team, they didn’t let that sort of narrow “black and white” thinking blind them to a big business opportunity. Fixing the physical grocery store.

I’m a big believer in experience driving technology — not the other way around. Why hasn’t grocery delivery taken off like the rest of Amazon’s business? There are probably a few reasons but I’m certain one has to do with people’s relationship with produce. If you’re cooking, you want to choose your ingredients — it may be just to check freshness but for many ‘chefs’ its more than that. The produce buying is part of the decision making and cooking process. That makes a trip to the grocery store worth the pain of the trip and the hassles of checkout. So in this case, technology loses to experience — and grocery retail survives the online onslaught.

Just this week, vinyl record sales passed digital downloads of music  — reversing the trend towards digital. Again, it’s the same story — people’s relationship with music goes beyond the llstening part. There’s the whole touch part of the vinyl record and the cover (which used to be a big part of the joy of music buying). That answers the key question: why would Amazon get into brick and mortar retail? It’s because retail grocery shopping delivers the maximum fit with customer expectations. So in comes Amazon, but how does it extend its unique advantage there.

Opportunity rooted in customer experience (and the customer relationship)

Make no mistake, Amazon has one reason to get into the retail grocery business — their unique ability to address the biggest cx problem facing the industry: the checkout line. But to really solve the problem, it takes more than the self checkout systems at many retailers. Amazon had the luxury of starting with a blank page — and designed the ideal customer experience for retail grocery.

What they’ve create with Amazon Go is like an uber pantry — you just walk in, take what you need off the rack or shelf and walk out. The technology allows Amazon to know what you’ve taken and bill you for it through your Amazon account.

Big Hurdles for Tradional Retailers

There are a lot of hurdles to other grocery retailer taking on this ‘ideal grocery store experience’.

1) One is obviously technology — the DNA of grocery retailers lies in real estate and distribution, not technology. That DNA shows itself most on the ‘bleeding edge’ — where the technology and service mix is highly innovative and untested.

2) The second (and in my mind bigger) hurdle is the trust and access relationship with customers. Amazon is already deeply embedded in customers’ daily lives — and they’re used to a degree of privacy loss in exchange for a superior experience. That willingness to ‘trade’ privacy comes from a trust level that few companies enjoy — that the experience will be worth the lost of privacy. Amazon has proven time and again it will deliver that experience gain. Grocery stores have not — so they’re far less likely to get customers willing to be tracked at the grocery store. So the opportunity is uniquely available to Amazon, which has both technological DNA and the depth of customer access to pull of the ideal grocery shopping experience.

Dec 7, 2016  

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