By Peiyuan Shao (Suki)
Defined as “understanding how one’s target consumers behave as shoppers, in different channels and formats, and leveraging this intelligence to the benefit of all stakeholders,” shopper marketing focuses on finding the sweet spot of “brands, consumers, retailers, and shoppers.” In 2000, with almost 50 years of rapid development, Fortune 500 Consumer Packaged Goods (CPG) companies are now facing the challenge of slow growth. One possible cause could be the explosion of Amazon that radically changed the retail paradigm and the expectations customers have adopted for their shopping experience. In the era of e-commerce, shoppers have become accustomed to the speed and efficiency of shopping online. Passive merchandising (waiting for customers to pick up and place products in the basket to gain a sale) no longer suffices in a shopper-driven world. Brick-and-mortar stores must transfer to active retailing, measuring the performance of displays. This practice is integral to the ultimate success of bringing products to the shopper in a more efficient and valuable manner, and Amazon has consistently excelled in this new shopper marketing concept.
Active retailing requires retailer marketers to acknowledge the limited shopping time of each shopper. It is inaccurate to simply assume a positive correlation between the trip length and shoppers’ spending. In fact, the average trip length in a particular store is just around 16 minutes per trip, and eighty percent of shopper time is wasted looking for items or waiting in checkout lines. It’s no secret that the shopper’s least favorite part of the entire grocery shopping experience is waiting in long checkout lines – often cited as the No.1 reason people dread going to a store, despite the aides of self-check-out technology and express check-out options.
The waiting time is now officially over (no pun intended)! Amazon Go, the all-powerful solution, is a brick-and-mortar store with no checkout required. Adapting advanced machine learning, computer vision, sensor fusion and AI, the “Just Walk Out” technology enables Amazon Go to declare “no lines, no checkout.” Since the debut of the Amazon Go concept video last December, the retail industry has been abuzz with chatter over the game-changing effect Amazon Go will have on the industry. Experts regard it as a bold, inevitable retail revolution, and are warning other retailers to be on the defense.
In my opinion, Amazon Go will revolutionize the future of retailing, especially shopper marketing for a couple of reasons.
First, “Just Walk Out” technology says it all. It has effectively solved the “last mile check-out” problems for shoppers, improving the conventional store shopping experience. No more waiting in line for a cashier to scan the product’s barcode. No more wave-and-pay systems for self-checkout. Just grab and go!
With computer vision, deep-learning algorithms, sensor fusion, and machine learning technology. Amazon Go will be able to collect and analyze the data that customers produce during their shopping trips. The data collected are not simply the purchase data or attitudinal data, but behavioral data that directly reflect the whole picture of shoppers’ actions. The old Radio Frequency ID (RFID) tracking technology could be phased out. Clearly, Amazon’s next step is to use the consumer behavioral data to make personalized choices, offers, and recommendations, just like Amazon has already done online.
Generally speaking, Amazon Go is a smart way to bring Amazon to a brick-and-mortar store (full circle from its humble beginnings). While e-commerce is gradually grasping a large pie of retail market share, brick-and-mortar stores are irreplaceable in the “Now” (immediate purchase) and “Surprise/Delight” (pleasure experiential purchase) market. Located in downtown Seattle, the first Amazon Go aims to position itself as a neighborhood convenience store providing simple and convenient foods to residents within walking distance. It’s no doubt that this move, not to mention the profitable private label of Amazon in the near future, will address the “Now” and “Surprise/Delight” purchase market that Amazon Online (even Amazon Prime Now) was not effectively addressed previously.
Another possible advantage for Amazon Go could be a decrease in operational costs. The automation attempts of self-driving technology, from forklifts to trucks, and Prime Air using unmanned aerial vehicles are all measures to confront increasing manual labor costs.
Amazon Go’s “no line, no checkout” brick-and-mortar stores are still in beta mode. But the success of the venture could determine the future landscape of retail shopping.
Peiyuan Shao (Suki) is an experienced strategic marketer interested in exploring insights using data. Prior to Northwestern, Suki earned her bachelor degree at Hong Kong Polytechnic University with a major in Tourism Management. After graduation from PolyU, she became a consumer insight explorer specializing in the hospitality and tourism industry. She had experience in social media marketing as the fashion editor at Anny-Style-On-Top, one of the Top 5 fashion blogs in China. At Medill, Suki is specializing in Brand Strategy and Digital Marketing and is inspired to start her marketing career in the tech industry. LinkedIn