Amazon Go and the Internet of Stores
Aisle411's Nathan Pettyjohn on why every retailer should be paying attention to Amazon's latest move from clicks-to-bricks.
Have you seen the new video announcing Amazon Go?!
Wow! If you’ve seen this video, you’ve likely double — or triple-checked — other news sources to see if this is “fake-news.”
How could Amazon possibly allow you to walk in, grab what you want off the store shelf and leave without ever scanning an item or checking out?!
Removing friction from the buying process is an obsession for Amazon, and this new announcement raises the bar. Amazon Go seems at first glance, too good to be true, but the technology is available to all retailers today, making this experience acheivable to any innovative retailer committed to bringing it to life. Here’s why this announcement makes complete sense for Amazon, and why every retailer with a physical store should be emulating it.
Why This Was Inevitable from Amazon:
Amazon.com was built to allow a user to ‘log-in” to their website and get a personalized, guided tour of their e-commerce site, recommending items the user might want based on previous purchases, recommending items based on what the user searches, and what other users purchased when searching for those products. It makes finding an item and then buying it, extremely simple.
Amazon.com tracks every search, every purchase intent, your path through the website, what items you look at for extended times, what you put in your shopping cart, what you remove from your cart, and what you buy. Everything is tracked from the moment you enter the site and throughout the entire shopping journey. After you leave the website, Amazon shows up on many of the other websites you visit, reminding you with ads, about that item you searched and viewed on Amazon, making it easy to buy.
Physical Stores Are Here to Stay
With physical store purchases still accounting for nearly 90 percent of all retail transactions even after a decade of e-commerce growth, Amazon realizes that continuing large-scale growth over the next 10 years as a company will require capturing a big slice of the physical store purchasing market — so as long as Amazon can make do with higher margins and less overhead than traditional retail stores.
The difference, Amazon added the internet to the store, instead of what most traditional retailers did, which was add the store to the internet.
Analysts are estimating that by 2021, Amazon will be the 7th largest grocery retailer, and Amazon is estimated to be planning over 2,000 physical store launches over the next 10 years as reported by Geekwire.
Putting the Sophistication of the Internet Into the Store
With Amazon Go, Amazon has taken the digital sophistication of shopping on the internet, and put it into the physical store. You “log-in” when you enter the store by scanning a digital barcode on your mobile device at the entrance.
Through digital mapping of products and computer vision sensors throughout the store, a “user’s” path through the store is monitored in real-time, tied to their log-in ID. Every shelf is analyzed like a URL on a website and is monitored related to the user’s indoor location to understand where the user dwells, which in turn implies purchase intent, and signals to an artificial intelligence engine the most likely items you’re about to put in your cart.
Shelf sensors are capable of monitoring weights of products, and by knowing you’re standing in front of those products, the Amazon digital store can better understand what items you pulled off the shelf, or what you put back on the shelf. This is assisted by unsophisticated plastic shelf slots that help make sure an item isn’t placed back on the wrong shelf, and it helps segment shelf sensors monitoring the weight of products being removed or replaced.
Additional data likely behind the scenes of Amazon Go is a sophisticated digital map of every product and where it sits on every shelf. Indoor mapping data offers contextual relevance to the shopper’s location and thereby assists in the entire shopping process.
Deep learning algorithms cross-reference the shopper’s previous purchases with what the physical store sensors and data are calculating.
Automated check-out is then made easy by leveraging computer vision and sensors to understand that you crossed the exit threshold, and thereby charging the shopper’s mobile account for what was placed in their cart.
Building the Internet of Stores for retailers has been the vision Aisle411 has been executing on for many years with some of the largest physical retail stores in the world. Digitally mapping every product to every shelf coordinate in over 14,000 locations has built a foundational data platform that can be expanded upon, allowing retailers to also offer a frictionless shopping experience similar to Amazon Go.
Amazon has raised the bar in removing friction from the buying process and every retailer should be looking to create the “answer” and beyond.
**Nathan Pettyjohn is the Founder and CEO of Aisle411, the leading indoor location data and navigation platform, which includes some of the world’s top retailers and consumer brands as clients and partners. Nathan has over 11 years experience in consumer product goods (CPG) marketing, advertising and sales into major retailers. Nathan worked on the account strategy teams for $50+ million ad budgets for consumer brands at a top 10 global advertising agency, Bates Worldwide, in New York City. He achieved top sales honors in the direct response marketing industry while at YellowBook USA, and managed teams of people in sales management roles. Prior to founding Aisle411, Nathan oversaw a multi-million dollar sales account with Lowe’s Home Improvement for an $800 million consumer products company, American Woodmark. Nathan has a BA in Advertising from Drury University.