Amazon Go Is A Game Changer

We have seen time and time again that convenience is king. A frictionless shopping experience will allow many customers to get their grocery shopping done quickly, and efficiently. There is no need to wait in line to check out. No need to pay at the register. This is a long overdue break-through innovation that will give Amazon a competitive edge in the grocery space.

 

Not only does the promise of convenience drive a competitive advantage for Amazon in the grocery space, but through technology, Amazon is able to drive efficiencies and, in return, reduce cost of operations in running a grocery store.

 

Business Model Advantage

Amazon is going to have the ability to apply their customer-centric methodology to the grocery space by driving convenience and lowering costs to the consumer.

 

Amazon will save money with their Computer Vision, Algorithm, and sensor fusion technology. Through Amazon’s Computer Vision, a customer will be able to take what they want off of the shelf, and it will be added into their virtual shopping cart. If a customer decides they do not want a certain product, they only have to place the item back on the shelf in order to have it removed from their virtual basket so they do not get charged for the item. This will save Amazon employee costs because they will not need their stores loaded with people restocking all the items that people leave in random spots of the store before checkout.

 

Second, shrinkage due to theft will become a thing of the past. Billions of dollars a year are lost due to theft in the retail space. With Amazon’s technology, theft will be a thing of the past.  Allowing computer to manage the virtual cart eliminates human interaction, which, in this case, eliminates theft.

 

Third, checkout will be an unnecessary expense for Amazon since the checkout process will take place in the shopper’s pocket automatically on their mobile phone. This will also reduce the number of employees, which will result in lower overhead for Amazon Go.

 

Finally, and most importantly, is the Amazon shopping algorithm. Amazon knows more about its customers through shopping behavior than most people can imagine. Amazon has the ability to learn from its customers within a geographic location to ensure that the right type of inventory will actually be available for purchase. What does this mean?  This means that Amazon can expect to see revenues of a football-field sized Walmart with a physical brick and mortar footprint the size of your local convenience store!

 

All in all, this is huge and I am optimistic that this will put pressure on existing grocery chains to “step up their game” in technology and convenience in order to compete with Amazon in this space.

 

The good news for grocery consumers will be that we can all expect huge improvements across the board in multiple chain grocery stores and improved pricing as others shift to compete with Amazon Go.

Big Changes in Ecomm

This morning, Walmart announced a $3.3 billion dollar deal to acquire Jet.com—the highest price ever paid for an eCommerce company. 

Jet.com has quickly become known for “Gamifying Shopping” with its pricing algorithm based on encouraging higher average order value baskets, while producing savings for their customers. However, currently less than 1/3rd of Jet.com’s orders are fulfilled from Jet.com’s warehouses. With Walmart and Jet.com teaming up, Walmart is able to leverage Jet.com’s pricing algorithm while Jet.com will leverage Walmart’s wide fulfillment network. 

With this deal, Walmart discussed its intention to keep Jet.com as its own entity, but it is needless to say that there is going to be plenty of opportunity for data sharing across both unique companies. Strategically, Walmart keeping Jet.com separate from Walmart.com gives Walmart the advantage of using Jet.com as its innovation center and pushing successes to Walmart.com. 

With this deal, Walmart is clearly positioning itself to give Amazon a run for its (well, your) money in the eComm space.

#PrimeDay – What You Need To Know

What is Prime Day? Prime Day is a day where Amazon has deep discounts on many of their products and services. Last year’s Prime day was the first time Amazon did this event, and although many of the products that were discounted were viewed as poor selections for such a large event, Amazon declared it a huge success with 19M new Prime Subscribers.

2016 Prime Day: At first Glance, Amazon has improved their selection of discounted products, and this year many bigger and more popular brands are playing in the event. Amazon also has many of their own products being discounted. Amazon Echo is being discounted to $129 from the regular price of $179, and today only you can get dash button’s for 99 cents.

Personalization seems to be a huge play this year on Amazon Prime Day. Amazon is leveraging advanced methods to give deals to individuals and creating a sense of urgency for purchases.

Along with increasing revenue, Amazon’s objective this year seems to be getting customers to get involved in the Amazon ecosystem. If you purchase a product using your Amazon Echo today, you will get $10 off on your first purchase. If your using Prime Now, you are also getting $10 off. Just to put the numbers into perspective, a Prime Customer spends $700 dollars more than a non-prime customer. 19M new prime customers at an incremental $700 is A LOT OF INCREMENTAL REVENUE!

Last year, Prime Day surpassed 2014 Black Friday sales, and I feel that this year Prime day has potential to be an even bigger success for Amazon. I also believe that Prime day will be a huge success for vendors that decided to participate. The increase in traffic, conversion, glance views, etc. on prime day will position the vendors that participated for an increased success than vendors who did not participate.

Whether you’re participating in Prime Day or just shopping for deals, I wish you Good Luck!