Xconomy
With “Go,” Amazon Identifies Another Job It Can Do Better
Early last year, I “fired” talk radio along with NPR’s morning and evening editions. That same day, I “hired” Amazon Audible as my commute companion.
It wasn’t a difficult decision. Audible is far better than its predecessors at doing the job I need done as I travel to and from my office – provide on-demand access to an array of rich, custom content.
I got to thinking about that firing-hiring recently when reading an article about Amazon’s new “Go” concept: a quick-stop grocery and convenience-meal venture that will allow consumers to grab what they need off the shelves (Amazon’s Just Walk Out technology tracks what’s added to the shopping cart), confirm the purchase, and leave without ever standing in a checkout line.
I fully expect that Amazon will be as successful with “Go” as it has been with so many other game-changing retailing innovations since it turned the book-selling business upside down and sideways at the dawn of the Internet revolution.
With “Go,” Amazon is demonstrating – yet again – its unique skill of understanding more deeply than anyone else the job that people need to be done and then leveraging technology to disrupt, innovate, and differentiate its offering.
Through a planned nationwide network of 1,800-square-foot “Go” stores Amazon is taking aim at a share of the $650 billion per year U.S. grocery market. A mere 3 percent market share for the world’s #1 online shopping destination would add a healthy $20 billion to Amazon’s total annual sales, which topped $100 billion in 2015.
Amazon’s initial target market with “Go” is the millions of consumers who make quick stops at different times during the work week for a bite to eat, to fill-in their grocery needs – i.e., milk, bread, snacks – and to purchase take-home meals for a family dinner. Regarding the latter, consider the square footage your grocery story devotes these days to higher-margin, pre-made meals – everything from breakfast and lunch offerings to soups, salads, and several-course meals.
It’s a lucrative but crowded market space with the large grocery chains, convenience store franchises, and local mom and pop operations all competing for the available dollars.
Amazon looked in depth at the job that the masses of weekday grab-and-go grocery and quick-service consumers need to be done. It concluded that simply getting their hands on a muffin, a sandwich, a loaf of bread, or a home-style dinner for the family at a convenient location was not the most important part of the equation.
The job that this group of consumers needs to be done, as Amazon sees it, is to save precious time in their day and reduce the aggravation of standing in line waiting to check out. Amazon believes it can get that job done by using technology to deliver the same frictionless shopping experience in “Go” stores that it provides with Amazon online.
Using the Amazon “Go” app consumers get the convenience of picking up what they need, scanning in the items using their smartphones as they go, and then simply walking out when they’re done. When they leave, their Amazon account is charged and a receipt is e-mailed. Smart and efficient.
The “Go” announcement was accompanied by some hand-wringing and fretting in the media about jobs disappearing as smartphones take the place of checkout employees, but Amazon’s take, correctly I think, is that speed, time regained, frustration elimination, and a no-touch transaction is the job busy consumers need done.
They’re betting that ending aggravating waits in the Express line behind someone who has a few too many items will deliver a significant payoff.