Nine miles west from the centre of London sits Ealing, a leafy and mostly residential suburb. It is also the location of Amazon’s first experiment with a cashierless store outside the US. The outlet opened on 4 March and your intrepid author took a trip there last week to see one vision of how the future of retail may look.
On arrival in Ealing, a queue of around 10 people were waiting outside the Amazon store. Some of this may have been due to social distancing measures, although when I asked one of the many helpful assistants present, they informed me that the queue’s length had stretched twice round the block when the shop initially opened – the excitement of novelty, or perhaps just nothing better to do during lockdown. The wait time at least allowed me to get my QR code for entry (just log in to your Amazon account via your smartphone) and to ask why Amazon had chosen Ealing (apparently its second choice, since footfall is not currently high enough in the City – its first choice – to justify an outlet there for now).
Once inside – there was a minor sense of satisfaction in having got through the electronic gate, somewhat reminiscent of boarding a plane – the Amazon outlet was both marvellously novel and depressingly mundane. At the end of the day, it is just a well-designed 2,500 square foot (232 square metre) convenience store with the usual range of ready meals, milk, bread, snacks and so on, even if some of the products are Amazon own-branded and sourced directly by the retailer. However, look closely and you will observe some crucial differences. There are no shopping baskets for starters. Instead, users are encouraged simply to grab an Amazon shopping bag (made from paper and obviously recyclable) and fill it with purchases. The ceiling is packed full of cameras and other sensing technologies. Every item you drop into your bag is miraculously recorded. When you’re done, you just exit; there is no check-out, no cashier. As a responsible and law-abiding citizen, it felt somewhat wrong or just hard to reconcile – there had been no interaction with anyone, and I had left with a bag of items. Minutes later a receipt had been emailed to me and the credit card already linked to my Amazon account had been billed.
What Amazon is doing here (and has done in the US since 2018) constitutes the holy grail for every digital services business: the effective reduction of friction and improvement in seamlessness of experience. If shopping trips can be this easy, then the implications for customer loyalty and repeat transactions are significant. Amazon may have a first-mover advantage in this respect – watch out conventional supermarket retailers – but much of the technology is far from unique/ proprietary. Also, don’t forget, the cash transferred from my bank account to Amazon still travels along the same payment rail (typically Mastercard or Visa). Further, the death of the retail assistant seems exaggerated. There were countless staff members on hand to help answer queries and to stack shelves. My retail experience certainly felt like a success (and your author’s wife was delighted with her bunch of Amazon flowers), but I was left pondering two things: what might Amazon do with all the additional data it acquires about users’ habits; and how do cashierless stores help improve financial inclusion, when you need not just a smartphone but a linked bank account in order to enter? Only time will tell.
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