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.

Connecting With Shoppers In-Aisle Via Mobile

 

How do brands break through the “cluttered” digital and “uncluttered” retail environment?

The concept of a “clean” store has been around for a decade. The idea suggests that consumers, in a desire to have a more pleasurable shopping experience, are a looking for uncluttered, clearly labeled aisles and products. They are looking for promotions and deals in store but not at the sacrifice of a manageable trek through the aisles.

We’ve seen this trend pushed to the brink of virtually no POP by Walmart a few years ago and more recently pulled back to a compromise but still the fact remains that brands have fewer opportunities to connect with the consumer due to a number of macro trends:

1. Clean Store policy – Retail brands are looking to own a branded store environment and keep aisles clean for consumers.

2. Digital disruption in-store – 75% – 90% of shoppers have used their phone while they shop in a retail environment (eMarketer and Internet Retailer)

3. Collapsed purchased funnel – The time from awareness to purchase to advocacy is short and growing shorter due to the dynamic of “always-on shopping” and the pervasive influence of digital shopping tools. In fact, digital tools will influence 90% of in-store retail sales by 2018 and already influence more than 65% of retail shopping decisions.

Given these realities, brands have to get smarter and think differently about how to reach the shopper in-aisle or anywhere where they are in a position to make an instant purchase decision. The rapid proliferation of mobile and in-store retail technologies that have infiltrated and disrupted the traditional shopper journey have forever enhanced, yet clouded the way in which marketers talk with and engage consumers and shoppers. In this type of environment the key question that marketers must consider is one of prioritization in order to reach shoppers at the point of purchase. So how do marketers go about prioritizing these digital opportunities?

In a world that is increasUntitledingly over-messaged, over-advertised, and maybe over-connected, how do you connect with your shopper differently?

It starts by applying the fundamentals of consumer research – understand the mindset of the consumer, the behavior of the shopper, and the surroundings of a person across the modal dialogue. So, in other words, we need to understand how the consumer moves from consumer to shopper to buyer to influencer mode not only behaviorally but in terms of what they think. At TPN, we call this the “Modal Dialogue”. By understanding the consumer you can better determine high-level focus areas around selection, timing and content. By determining these focus ares we know where our message be seen along the shopper journey (in-store, pre-shop, etc), what type content we should be developing (inspirational, instructional, etc) and the timing of our message based on behavior.

With a deep understanding of the consumer, we can reimagine how to effectively communicate with her across channels. As we look across channels at TPN, we look to marry traditional in-store channels with digital and emerging strategies. With more than thirty-five identified digital channels mapped at TPN, this proves to be a challenge to prioritize but offers the best opportunity to market in aisle when retailer based programs are inefficient, aren’t available, or simply aren’t differentiated.

At TPN, the way we do this is to of course, look at the objective of any particular marketing and / or activation campaign, but we also look at the opportunity to effectively reach the shopper in a way that is most relevant to her. As we look to find third-party strategies and tactics to reach a shopper in the aisle, we may find that she is responsive to push notifications that provide timely and relevant content, like recipes or dinner hacks, while she is in shopper mode. We may find that she is responsive to virtual reality experiences at the shelf that immerse her in the brand. We may find that she is browsing the web via apps or her web browser and is responsive to advertising and messaging during those experiences. The power of mapping out her digital preferences, channel reach, and the potential of those channels allow us to more efficiently develop the tactical mix to activate in aisle.

With many, but not all, of the tactics that we look at, we can now reach a level of precision targeting and efficiency in ad spend that really does thread the needle for the campaigns we run. For example, using data management platform partners, media partners, and emerging technologies, marketers can target specific consumer subsets in aisle. More and more we can message the consumer with personalized messages based on a variety of variables right in the aisle.

In essence, as brands look to find ways to better target consumers and shoppers in a crowded digital and increasingly clean store environment, they must look at intelligent, respectful, and calculated use that digital channels can provide the greatest ROI. Thoughtful planning can redefine how shopper marketing interacts with and engages the shopper in-store. The keys to remember are that relevant, efficient, activation-oriented campaigns can succeed but they must enhance, not detract, from the shopping experience.

It’s All In The Delivery

The ways we eat meals continuously evolve as our lifestyles, social dynamics and workloads change. The frozen TV dinner changed the landscape of meals in the 1950s, streamlining meal prep with readily portioned trays that could be popped in the oven for easy weeknight meals. Tupperware enabled make-ahead meal prep possible, as well as proper storage of leftovers for reheating later. The mainstream introduction of the microwave in the 1980s, lead to more adaptations of ready-to-eat meals (and of course, the HotPocket).

Take out and delivery used to only be synonymous with pizza and Chinese food; fast food was burgers and fries (itself an evolution from street food vendors and bar food). Now we have apps that will coordinate pick up and delivery from just about any restaurant you could possibly want, at the touch of your finger tips; we gleefully hunt down specialty food trucks or trek down to the food truck lot, serving as our modern day, anywhere food court. Our busy schedules may not even lend themselves for meals, which has lead to a rise in snacking, a whole different conversation but one that I wanted to at least acknowledge.

So, while all this should beg the question Does anyone really cook anymore? Quite a contrary movement has taken place. Instead, there is appreciation for the home-cooked meal. The traditional route still involves grocery shopping for items needed for recipes, cooking the recipes at home; the routine is broken up by inspiration found on recipe sites, blogs, Pinterest and those droolworthy videos popping up in your feed that make all cooking look easy. According to Joe Scartz, TPN’s Managing Director of Digital Commerce and Integration, “Grocers have seen the trend move toward simple prepared meals now for years and they have tried to fight back with white label brands and grab and go meals.”

Retailers are also offering up opportunities to streamline the traditional process through omni-channel retailing of buy online, pick up in store: Walmart grocery is available in limited areas; CVS is testing CVS Express for a rollout later in 2016; Harris Teeter Express Lane has been around for awhile, also offering home delivery; Ahold’s Peapod is a online grocery service delivering orders and providing them for pickup; Amazon Prime Pantry is gaining speed as well, just to name a few. Inspiration becoming a final product precipitates social sharing of successes or pride in fails.

Meal delivery services, for those who can afford it, offer an alternate route with the modern convenience of having everything you need boxed up for you, ready to assemble/cook, so you can post it to your social media, aka humble brag “I made this.” What was once relegated to weight loss programs like Jenny Craig, these meal services now embolden people to be their own top chefs in the kitchen, with recipes that range from updated American traditions to ethnic fusions with unusual ingredients, previously found only in restaurants. The types of services available seem to only be limited by an entrepreneur’s imagination: local farm-to-table services, gluten-free services, food allergy services, high-end, unique services, etc.

A natural fit for its brand, Weight Watchers has partnered with meal service Chef’d to provide points-approved options that work well with their diet plan. Blue Apron has taken the lead of the services, with a somewhat customize-able recipe offering and subscriptions with meals for 2 and larger families as well; their price range is roughly $60 to $140 per week, depending on the number of meals delivered. Blue Apron also offers wine solutions as well, to partner with the meals. The convenience takes away all guess work and is winning with folks who alternatively, ate out or brought home meals on a regular basis.

We’re seeing how retailers are adapting to our ever changing foodie landscape, what can brands do to adapt? “Brands should be doing more to partner with the home delivery meal services if they want to attract this type of consumer. That being said, while consumers “barely” have to go to the store, 97ish% of all of grocery shopping is still done in-stores of various formats. It’s one of the slower ecommerce categories to catch on but that is changing, slowly,” says Scartz. To that point, “Brands need to worry less about the fresh food meal delivery service and need to worry more about being shut out of impulse purchase as grocery ecommerce does grow. For example, once a consumer creates a list for Amazon.com, they are apt to reorder the same products. Same goes for Instacart or Peapod or whatever. Brands need to market and merchandise on those platforms with an eye toward subscription, especially as omni-channel retailing becomes more the norm.”

Is This the Year of the Beacon?

It’s a new year. 2016. All the shopping, all the traveling, all the holiday meals, all the relatives, all the returns, and of course, all the Star Wars. Done. We made it. So let’s look at the year ahead of us. What’s in store for retail technology in 2016? That’s a pretty broad question and one with a million answers and points of view. In fact, check out TPN’s own Manny Alamagro speak on the topic of Technology & Retail at CES on Jan 6. Instead, let’s look at one area of potential for 2016: the mobile beacon.

Since beacons became the buzz in 2013, there has been a perpetual question to follow: will this be the year that the beacon really hits the mark, connecting retailers and brands more closely with their customers? Will this be the year of the beacon? Forbes asked this question of 2015, noting the strides that brands embracing location-based, proximity marketing could expect to see:

The companies who can get closest to the shopper – making her experience as efficient as possible – will boost their brand’s value and, more importantly, drive sales in the digital economy. Conversely, customers who have to do the least amount of work to find what they want for the right price will show their appreciation in dollars.

So how is this expected to come to fruition in 2016? Well, one indicator is that more retailers are signing contracts with beacon providers, which implies that more retailers are becoming equipped with the technology and ramping up to ping their shoppers. According to Ad Age, “global brands including Carrefour, Ikea, Macy’s, McDonalds, Pizza Hut and Target signed contracts with beacon providers in the last quarter, according to ABI Research, and Facebook this summer began distributing the trackers for free to small businesses.” Simon Property Group and Macerich have also placed beacons in their shopping centers. As with any emerging technology, as it becomes more prolific, it will also begin to feel more common, more normal to those that engage with it, which is an important tipping point. So it seems that one hurdle, that of beacon availability and placement, is lessening as more large retailers and brands are pushing for adoption, hoping for those key nuggets of data to understand their shoppers better.

Another indicator is going to be reliant on shoppers, who must opt in and download apps to their smartphones in order to receive any notifications from beacons. Just a few years ago, the biggest hurdle seemed to be the relatively low number of shoppers that adopted smartphones; nowadays, that hurdle has vanished, only to be replaced with perhaps a larger one: permission to push alerts to shoppers’ phones. There’s a slippery slope of trust between brands/retailers and their shoppers. I think email is a prime example of this relationship. A shopper opts in to receive a retailer’s emails for a one time discount. From there, any number of scenarios takes place: the shopper continues to receive and look at the emails, sends them to spam or unsubscribes from emails completely. That line of communication can falter at any time, even when a shopper is a diehard fan of a brand/retailer. One email too many in too short of a timeframe, feels pushy. Over the holidays, I had one day where I received 5 emails from the same retailer – it was too much.

The shopper has to feel like the benefits outweigh any twinge of annoyance be it with emails, or ultimately push notifications. If the notifications are personal (but not creepy), timely and helpful, then shoppers will be drawn in, engage and feel rewarded if they score a deal. Such is the approach with ShopAdvisor, which presents its app as a shopper’s personal concierge. As discussed in the New York Times:

With the aim of driving shoppers into stores, ShopAdvisor incorporates data analytics that filter a shopper’s preferences and provide a way for retailers to send personalized alerts to consumers who have downloaded a brand’s app, offering discounts, highlighting sales and providing content such as product reviews that might instantly sway a buying decision.

“We’ve had at least three years of heavy-duty location-based marketing under retailers’ belts,” said JiYoung Kim, senior vice president for Ansible, the mobile division of the Interpublic Group, the global marketing company. “Everybody has the same tool, and targeting alone can only take you so far.”

What makes the ShopAdvisor approach enticing, Ms. Kim said, is that it not only precisely locates a shopper in a store but provides personalized creative content from that retailer to that shopper on the spot. Offer that shopper a 20 percent discount on some new black pumps she has been eyeing, along with a positive review from a popular fashion magazine, and a purchase is far more likely.

Through this route, ShopAdvisor doesn’t feel overly pushy and by engaging shoppers so they feel like they are “in the know,” the app has jumped that hurdle of permission and created portal of connection between beacons and shoppers, thereby connecting shoppers and brands. ShopAdvisor is just one of many shopping apps, but it seems to have made good on connecting beacons with shoppers in a promising fashion.

I also anticipate that as retailer-specific apps become more sophisticated and the use of them becomes a more integrated step in the shopper journey, additional progress with beacon notifications will happen. I think the Target Cartwheel app, is doing just that: getting shoppers used to seeing the signs in store and then getting the deal by checking the app. It’s a bit of a training wheels approach to making Cartwheel a natural part of the Target shopping experience. And with Target making beacons available in store, I would be willing to bet that beacon notifications will eventually substitute those Cartwheel signs in store and in order to keep shopping with the benefits of Cartwheel, shoppers must allow the alerts. While this approach too relies on shoppers feeling like they are getting special deals, it has the added benefit of building on their newly-ingrained shopping process tied directly to the retailer and in fact, could build on to the loyalty.

So, with all that said, is this the year of the beacon? Since my magic eight ball says try again later, I think we will have to wait and see. It’s certainly a year for beacons to gain momentum, but the extent of it remains to be seen.

Image: Getty