Amazon continues to dominate the online space as one of the fastest growing companies in modern history. Its aggressive expansion shows no signs of slowing, but could the tech giant really take over our high streets?
The world’s largest online retailer is now worth $940 billion. Its main areas of business are cloud storage and its online store, but the number of industries the company has a hand in is extensive. Smart home devices, film studios producing original content, and aviation robotics are just a few.
Amazon’s expansion accelerated with the introduction of the Amazon Echo speaker with Alexa, just four years ago. We have welcomed the expansion, inviting Amazon into our homes and trusting the company with an exceptional amount of personal data. Many of us are Amazon Prime subscribers, loyal to an efficient and competitively priced online service. But in what may seem a counter-intuitive move, could the company make the move from online giant, to offline success?
No need for scanning or checkout queues
It was late 2016 when Amazon launched its first experimental grocery shop – Amazon Go; a store without cash desks or cashiers. Once the mobile app is installed, customers simply pick the items they want from the shelves, put them in their bags, and walk out. A receipt is then sent to the customer’s phone with a record of how long they’ve been in the store.
Bloomberg reported that Amazon may open as many as 3000 Go locations by 2021, rivaling existing convenience stores such as 7-Eleven, and sandwich shops like Subway. This headline comes in sharp contrast to the recent headlines regarding our long-standing British retailers. Following in the wake of high street favourites Marks & Spencer and House of Fraser, Debenhams announced it would be closing 50 stores over the next five years. The department chain reported annual losses of almost £500 million compared to profits of £59 million the year before.
Will we sacrifice privacy for convenience?
In Amazon Go stores, hundreds of cameras track your every move. The cameras create a three-dimensional image of you to ensure it is you that picks up a pint of milk, rather than another customer. The data is kept just long enough to provide a receipt – or so Amazon says. For some consumers this will be a step too far. Amidst fears that Alexa is ‘always listening’, some may suspect that Amazon watches and always remembers!
We may have concerns about our data and privacy, but ultimately the easy option tends to win. Just as it’s easier to have our passwords saved in our browser than re-enter them every time, as consumers, we’ve decided that convenience is worth the risk. The result? Our once trusted brands, such as BHS and House of Fraser are falling by the way side in favour of a more convenient option.
The easier it is to buy from a store, the more likely that person will return. We’re all time poor. Time has become our most valuable asset. There are already unmanned convenience stores or ‘smart shops’ in China, but to launch one of these stores is costly and still highly experimental. The world will be watching Amazon’s offline expansion. If they continue to provide convenience and maintain a level of trust with their customers, an offline retail revolution could well be on the cards.
Does technology provide a solution for stores that are struggling?
If our high street stores are bold enough to embrace new technology, could tech be the saviour of our high streets, rather than its demise? As time poor consumers, providing greater convenience is the way retailers should go. It could be argued that the novelty and ease of cashless stores would in fact bring customers back to struggling high streets. But how long would the novelty last, and what do we lose by embracing the Amazon Go model?
Will convenience kill community?
In our quest for convenience, are we missing the true value of our high streets; our human interactions? This should not be overlooked. Small talk does us good, as does helpful customer service and sales advice from a real person, face to face, as we need it. The most successful high streets are ones with a sense of community and a localised identity. Yes we need convenient and efficient retailers, but can’t we keep a bit of personality too?
Embracing technology to introduce staff-less or cashless stores is not an attractive solution for most retailers, but reviewing their processes with the view of making them more efficient is something all retailers can get behind. Sofology is one such company that continues to review and improve their processes, using technology to streamline the customer experience. Read how we worked with them to bring a new level of efficiency through bespoke development software.
Kaleida is a bespoke software development house in Manchester, serving clients across the UK. To enquire about a free software review, please feel free to get in touch with our team, or find out more about our services by exploring our website.