How retailers can keep up with Amazon Go

The sci-fi fantasy of seamless, AI-powered shopping has captivated the public imagination for many years running. Today this dream is essentially a reality, as evidenced most recently by Amazon’s new physical grocery store, Amazon Go, which features a checkout-free shopping experience facilitated by a smartphone app and powered by “computer vision, sensor fusion and deep learning” technologies.

With many industry experts speculating that Amazon Go is ringing in “the future of retail,” brick-and-mortar retailers must brace themselves for a market wherein a virtual-physical hybrid shopping experience is not only desired, but expected. Amazon will undoubtedly continue to shake up brick-and-mortar stores in the coming years with technology innovations, and other retailers must significantly step up their in-store digital strategies in order to remain competitive.

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How can retailers and retail technology firms work together to keep pace with this disruption? What specific technology does a retail store need to set the foundation for an AI-powered shopping experience? And what are best practices for brands to consider as they begin to digitally map stores to enhance the customer experience?

Brick-and-mortar well positioned for innovation

Even though ecommerce continues to grow, consumers still prefer a real-life shopping experience. This is especially true when it comes to shopping for food, a task that 92 percent of U.S. consumers prefer to do in person. Given this, it makes sense that Amazon chose a grocery store as its first digitally enhanced brick-and-mortar experiment.

Of course, grocery stores are not the only shopping category up for disruption — if Amazon continues to open checkout-free shopping stores, the entire brick-and-mortar market will have to adjust.  Retailers that have already invested in the foundational infrastructure needed to power in-store digital technologies are well-positioned to pivot to a checkout-free model. Those that don’t have a digital infrastructure in place, however, will need to work fast to stay competitive.

Despite this, traditional retailers still have the upper hand over Amazon in the physical retail market given Amazon’s lack of experience managing brick-and-mortar locations. As Amazon tinkers with its physical store model, traditional retailers must work to provide new models, enhance shopper experiences, and predict which new innovations will be most attractive to consumers.

Amazon’s promise for the future of retail

While the checkout-free concept isn’t new, Amazon is the first to execute it in real life. They’re well-positioned to do this because of the sheer amount of retail tech properties under their umbrella. At their grocery location, Amazon has full control over every aspect of the store, from the physical and operational infrastructure to the supply chain and inventory, even down to the staff.

And while this structure is largely what allows Amazon to create something like Amazon Go, it is unrealistic and cost-prohibitive for other retailers to pursue a similar, completely in-house operation. More importantly, the technology behind the Amazon Go store is not yet fully understood as the company tends to hide it behind a shroud of buzzwords.

More clear are the processes the technology allows. Consumers walk into the store and log in using the Amazon app on their smartphone, and the store detects their presence. Then, using a network of cameras and sensors, products picked up and retained by shoppers are automatically added to their Amazon account. Once the shopper walks out, the store senses their exit and charges their account for the bill.

The technology needed to stay competitive

Though the details of the technology itself aren’t clear at this point, knowing the subsequent processes makes it easier for other retailers to build off of Amazon’s foundation for a “just walk out” store. For example, a number of independent retail technology startups are building sensors that show where inventory is within the store. Beacons are also being used to send targeted recommendations to people as they shop.

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Underpinning it all is the indoor mapping technology that shows retailers where products are located within their stores. Digitally mapping a store provides the critical context needed for accurate product location and indoor navigation, which is the backbone of any good AR experience in retail. It enables retailers to connect the physical location of products with digital information, unlocking the opportunity to show shoppers personalized deals, product suggestions, local and online inventory information, and other information based on the shopper’s preferences, location, and the product they are viewing. When paired with sensory technologies, it would also help enable a checkout-free shopping experience.

Yes, these are the types of technologies that will help traditional retailers keep up with the times. But even better, retailers can learn from Amazon’s innovation, see what works, and implement their own digital programs accordingly. Brick-and-mortar retailers have the potential not only to follow Amazon’s innovation, but build and perfect it to create an even better experience.