Three ways Amazon Go’s automation will impact the retail industry
Could “paper or plastic?” become a question of the past? In early December, Amazon opened its checkout-free store concept, Amazon Go, in Seattle. Initially open only to employees, the store is expected to open to the public early this year. With the e-commerce giant’s “just walk out” technology, customers are able to swipe their app when they enter, pick up items they want off the shelves, and exit without cash registers or lines.
But what does this automation mean for the future of the retail industry which employs more than 42 million workers in the U.S. alone? By virtually outsourcing cashiers, Amazon Go has the potential to turn the traditional retail job, a long-time cornerstone of the American economy, on its head.
As technology advances, the need for face-to-face communication in retail sales cannot be ignored. Here are three key points retail owners and employees should keep in mind amidst the rise of Amazon Go’s automation technology:
Retailers will adapt to customer expectations, but change won’t happen overnight.
According to some media reports, Amazon plans to expand its automated grocery concept across 20 major U.S. cities by the end of 2018. But this certainly isn’t the first major tech innovation in the retail industry; self-checkouts have been on the rise for decades, with the first machine built in the 1980s.
But even with 325,000 self-checkout units in stores worldwide, many customers prefer a more hands-on retail experience, especially with large or complex purchases. By embracing self-checkout technology rather than rejecting it years ago, retailers are now able to please both customers who enjoy speed and efficiency and those who prefer the face-to-face experience. Similarly, today’s retailers should adapt to their customers’ changing tech expectations when it comes to “just walk out” technology like Amazon Go but also address the needs of customers who prefer traditional methods and personalized experience.
In addition to cashiers, other employees will still be necessary in checkout-free stores. Shelves will still need to be stocked, inventory will still need to be received, and customers will still have questions for associates; while automation will make some retail processes more efficient, it won’t completely replace the human workforce. In the process of upgrading their tech, retailers can’t ignore their most valuable resource: people.
Quality customer service become even more valuable.
The shift toward checkout automation is indicative of the evolving demands of customers who have more buying power and choice. This innovation stands to improve the in-store experience for customers who prefer efficiency, but for customers who seek a more hands-on, personal sales approach, retailers need to look at how they can better engage their staff to improve the quality of customer service.
Face-to-face service will be a key competitive advantage for traditional retailers and, as automation expands, human interaction could even become a luxury or brand differentiator down the line. Stores who are able to leverage customer service now will be able to embed it as an extension of their brand, giving them the opportunity to leverage this asset later if competitors sacrifice customer service for automation.
Training initiatives will be necessary to boost customer service.
When retailers use customer service as a key differentiator, they need to ensure their employees are informed, up-to-date and know how to sell a specific product offerings and communicate ongoing promotions. Today, it is still especially difficult for chain stores to effectively extend unified training programs to large workforces across numerous locations and execute campaigns. To combat this, chain stores can now implement employee engagement platforms that provide readily accessible communication and training functions across desktop and mobile platforms. Some of these platforms even include gamified learning programs to educate and evaluate employees quickly and efficiently, providing them with product knowledge that will become the store’s competitive edge.
Regardless of whether retailers see Amazon Go as a revolutionary offering, a major threat, or both, they should take note of Amazon’s grab-and-go vanguard technology as the next step in customer experience evolution. As evidenced by automatic cash registers, price scanners and anti-theft security, technology is not the enemy of retail. Rather than running from new developments, retailers can respond by leveraging what may become their key differentiators: informed employees and quality customer service.