Amazon Continues to Reshape the Retail Industry

retail industry, grocery store shrink

The idea of shopping online for groceries is not new. Retail technology companies have tried over and over to fix what people hate most about grocery shopping – long lines, slow moving cashiers, and now, the long wait for chip credit cards to process. As history has seen, however, the retail industry is slow to change on one issue that is critically important when it comes to groceries; touching and feeling the product. There have been many technological advances to improve the grocery shopping experience. Some have worked, some have not.

Self-Checkout

It sounds good and has worked reasonably well for some types of retailers. But grocery checkout is often more complicated. Weighing produce, having to wait for clearance when purchasing alcohol, and malfunctioning scanners are all major frustration for consumers. Many grocery chains have begun to remove or at least scale back on self-checkout. Only 41 percent of shoppers say they have used self-checkout in the grocery store.

Delivery

It is said that history repeats itself. It’s true in the retail industry. Once upon a time, most grocers delivered. But the rise of supermarkets and the automobile virtually ended the practice. In the late 1990s, Webvan had some success in web-based grocery delivery. But they lost millions of dollars and went bankrupt in 2001. There have been others. Even some large supermarket chains began experimenting with online order and delivery. Arranging delivery windows and guaranteed availability of items ordered online have been major problem areas. Plus, the consumer can’t squeeze the melons. In 2015, only 2.4 percent of U.S.retail industry grocery sales were online.

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Self-Scanning

Europe has seen some modest success around having customers self-scan grocery items with their smartphones and use apps for mobile payment, thus avoiding checkout lines altogether. Meanwhile, the U.S. retail industry remains skeptical.

Dash Away

Amazon took a swing at the online grocery market in 2015 by launching its Dash button. The wifi-enabled devices are branded with specific products, such as Tide detergent. The customer simply clicks the button to re-order from their Amazon account when needed. But adoption of the concept has been far from overwhelming.

Smart Appliances

The idea of your refrigerator keeping track of food inside and having a food purchase app is novel. Samsung has been pushing hard in this area. However, to date, technical glitches and the continual need to update software have been major hurdles.

Mobile Payments

Mobile payments are catching on rapidly but still only represent 19% of all purchase payments. Again, technical glitches have prevented widespread adoption. The requirement to have a relatively new and sophisticated cell phone and concerns over privacy and data security are also major issues.

Delivery Drones

Again, the retail industry remains skeptical. Amazon is hard at work trying to iron out logistical and regulatory issues to bring it to reality but progress is very slow.

The widespread adoption of online shopping for groceries isn’t here yet. But, as we know, Amazon never gives up thinking about how to make shopping more convenient for the consumer. The Amazon Go grocery store is now in the testing stage in Seattle. It is still a ways away from Star Wars, as the concept is grounded in a brick-and-mortar store. The idea is to allow shoppers to walk into the store, pick items up and walk out, totally skipping the checkout process. Everything selected gets automatically charged to the customer’s credit card. The system relies on a series of cameras and microphones. A customer’s smartphone is “tagged” when entering the store using the Amazon Go app. The system tracks the customer’s movements throughout the store. Customers’ selection of an item or returning it to the shelf is closely tracked by cameras. Payment is automatically calculated for all items selected and charged to the customer’s account. The customer simply leaves the stores with their purchases.

It is certainly not online shopping but uses the latest technology to make grocery shopping more seamless for the customer. Will it happen? Maybe.

But, as we have seen, the U.S. retail industry customer is skeptical. Loss of control, and concerns about Big Brother and privacy issues still need to be overcome in order to make technology-assisted grocery shopping a reality. And, how do you squeeze the melons? Time will tell.

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