Technology
Amazon takes vision into grocery market
Amazon’s US$14 billion ($19b) buy of upmarket grocers Whole Foods Market has left the multi-trillion-dollar worldwide retail industry like possums caught in the headlights of an oncoming juggernaut.
Chances are retailers will be playing possum soon: investors were quick to dump shares in Whole Foods competitors after the acquisition was announced, wiping tens of billions of dollars off their value, as analysts wrote off giant chains like Walmart as being “screwed”.
When he started out, the online retail giant’s founder and chief executive Jeff Bezos derided the costly old-fashioned model of bricks and mortar stores compared to selling online efficiently and cheaply.
That was then: the online retail giant has done well out of a lowmargin, high-volume sales model that is cross-subsidised through its cloud computing business Amazon Web Services. It can now branch out into areas where a pure online presence wouldn’t be enough.
Like grocery stores, where a hybrid real-life/online model made more efficient with tech makes sense.
Bezos and Amazon will now have
A good shopping experience is when you escape the supermarket in record time, having found everything you wanted, and not had to [queue] to pay for them.
465 Whole Foods stores in the United States, Canada and the UK to hone that notion.
It’ll be curious to see if Amazon will hang on to the more than 90,000 staff Whole Foods Markets has or let a bunch go to cut costs; but, Amazon means tech-driven changes and automation will happen in retail.
Thing is, most people hate getting groceries. A good shopping experience is when you escape the supermarket in record time, having found everything you wanted, and not had to queue up to pay for them. How often does that happen though?
Retailers have invested in technology of course to make shopping more attractive. Apart from online shopping, there are selfservice checkouts replacing surly cashiers and grocery baggers earning minimum wage.
Self-service checkouts make not for a happy shopping experience however. The machines monotonously mumbling “put the item in the bag” at you and rousing the poor person with the swipe card as they lock up in protest over your bagging incompetence is retail tech done wrong.
Amazon is working on fixing this with its Go stores, which don’t have checkouts — you throw what you want into a trolley or a basket, and get out when you’re done and pay for things automatically.
You need a smartphone, the Amazon Go app, and to scan a QR code before being let into the store. How well shopping like that works in practice (and how much of a privacy violation the concept is) remains to be seen though, especially if your phone runs out of battery.
A Swedish mobile cafe company, Wheelys, has set up an unstaffed, 24/7 shop in Shanghai with local partners, that operates along similar principles, with an app identifying you as the buyer and sorting out the payment of the goods for you. The main difference is that Wheelys wants to sell the tech to store owners, and not open and run shops. Due to this, Wheelys reckons the staff-less shops are a good thing for remote areas, where stores would struggle to be viable if workers had to be hired.
In fact, grocery stores without staff sound ideal for Auckland, where shop employees on low pay can’t afford to live in the city or spend their earnings on commuting for hours on congested roads.
That’s the future of your daily shopping, like being inside a big vending machine with artificial intelligence and machine learning via your smartphone as the store assistants. We might end up feeling nostalgic for the days of surly supermarket cashiers after all.