Retail As We Know It Is About To Move Into A New Paradigm
What does the advent of Amazon Go mean for retail?
I reminisced about my time working in retail in my first blog post – and back then, I had no way of knowing which items were sold on which day of the week, or which items were purchased together in a transaction.
But as we know, times have well and truly changed, and this month Amazon has completely revolutionized the retail game with the announcement of its new physical store concept, Amazon Go. For consumers, shopping won’t ever be the same again, thanks to the blend of digital, Internet of Things (IoT) and mobile technology.
So, what is this new shopping concept? Amazon has created the world’s most technologically advanced retail experience that means shoppers will never have to wait in line again. Enabled through the Amazon Go app, you simply enter the store, take the products you want and go! No lines, no checkout.
You can imagine the convenience and ease of payment this will create for time-starved consumers. Once adopted widely, this new technology-driven, physical store concept will shift retail into a new paradigm - pushing us away from the previously innovative concepts of self-service checkouts, hand-held scanners and mobile cashless payments. I’ve worked in retail for my entire career, but this is the single biggest transformation I have witnessed - and that includes the online revolution of the 90’s!
But it is not just the new consumer experience that excites me. It is realizing how much Amazon will be able to learn about consumer shopping habits from the physical world of retail as well by using digital, mobile and IoT technology.
I recently read a study conducted by Management Events on the growth of IoT. Based on responses from 11 countries, the headline news reported that 30% of organizations will invest in IoT by 2019 as a technology priority - seconded only to analytics.
Amazon Go will be using IoT for its ‘just walk out’ technology, to automatically detect when products are taken from or returned to the shelves, and track them in a virtual cart based system, using IoT sensors embedded into their shelves.
This opens up the opportunity for Amazon to analyze with laser precision the shopping habits right from the shelf edge. From the order consumers put items into their shopping bags, the exact time (to the millisecond) items were picked off the shelf, Amazon will know more about the buyer's journey. That also includes which of their products have the largest affinity, how long consumers spent in the store, and the step-by-step journey they took to complete their shopping.
Retailers have been analyzing market-basket purchases for many years now whilst continually trying to understand product shelf availability. But by taking advantage of IoT capability such as sensors, digital cameras and mobile technology, the industry is ready to uncover a much deeper level of insight.
From a Qlik perspective this is very exciting for three reasons:
- Qlik’s Visual Analytics Platform enables IoT data to be associated with other traditional data sources, to help discover new insights into shopping behavior.
- IoT Innovation will come from putting analytics into the hands of all employees, by allowing self-service discovery in the data.
- For IoT value to be realized, insights will be shared and acted upon across the entire organization.
In 1950, Sainsbury’s - a UK grocer where I previously worked for 19 years - was one of the first retailers to introduce the latest shopping experience paradigm shift. It offered 'queue-less shopping’ - a self-service concept that allowed consumers to shop the store by pushing a metal trolley around the aisles. Just imagine what the inventor of this ingenious innovation would think of Amazon Go!
Anyway, that’s enough from me, why not check out Qlik’s point of view on IoT with our latest article our devices are talking but are we listening?
