Amazon Go? Forget them, Albertsons Has a Better Idea

There’s much ado about Amazon’s new concept grocery store, but Safeway’s merger with Albertson’s has resulted in using an old concept that makes a lot more sense… well at least to a Gen Z’er.

safeway-albertsons-merge

The 2014 merger of Albertsons and Safeway was one you probably didn’t pay much attention to.  Well I know I didn’t…at least not that much.  One the other hand any announcement from Amazon, especially one involving a “physical consumer facing” store is sure to make some headlines, you know what I mean?

The E-commerce giant Amazon is continuing to push towards dominating the commerce market as a whole.  The company recently announced a concept store in Seattle called Amazon Go.  There’s a lot of fuss about this new concept store, and for a good reason; it’s a great concept.  You walk in, grab what you want, and go.  I the concept, although the key question that comes to mind is – Does it solve the biggest pain point with grocery shopping?

I think not.  Now don’t get me wrong, its a really cool concept and a huge leap in innovation that has a lot of potential.  Amazon’s combination of computer vision, sensor fusion, and deep learning is some pretty cool technology.  But it’s just not cool enough to take over the brick and mortar consumer experience altogether.  You’re probably wondering why not?  I would never have to deal with another cashier, don’t even mention the lines. Trust me we’ve all seen them.  Can’t we just eliminate everything and put Amazon’s technology in all brick and mortar consumer-facing stores?

Problem Solved, right?

Wrong!

Here’s why: Amazon is very successful in what they do best, e-commerce.  They know the industry very well and are pioneers in the ever growing e-commerce world we live in today.  Amazon Go is seeking to change the brick and mortar “customer experience” or the “sales process.”  I get the approach. Make things kinda online, more personal, more efficient, and “better” for the customer. Well…at least better in theory.

Amazon Go’s small size and limited selection means that it won’t eliminate a trip to the grocery store for the average consumer.  And it still requires you to wander around the store and grab stuff off the shelf.   We may think that’s fine as long as we don’t have to deal with those tedious lines.  But you see, we need more than just eliminating lines.  Even if this is “enough,”   we will not be content with just eliminating lines.   A fast and frictionless consumer experience would be great but…

What you want is not necessarily what you need

What you need is a phenomenal shopping experience like no other. And that’s one thing that Safeway and Albertsons now understand.

“We plan to be the Favorite Local SupermarketTM in every community we serve,”

I’ll tell you what, that phrase is trademarked for a reason. Those are the words of Robert Edwards, Safeway’s Chief Executive Officer. In the same press release, he also mentioned a shift in the way things would change in all the new brick and mortar stores. You see Robert understands that the old way wasn’t working so this time around things would have to be different. It’s a lesson Albertsons and Safeway learned from failing to innovate, and one Amazon should be paying attention to.  He went on to say…

“We will do this by knowing, listening to, and delighting our customers; providing the right products at a compelling value; and delivering a superior shopping experience. We will also continue to be active members of our local communities.”

Now let me tell you a short story:

For most of my of my life, I’ve lived in one house, close to an Albertsons. This Albertsons was one place I often visited because I always got what I wanted.  Thanks to the self-check out, I would slip in an item or two and into my bag minus the scan.  I now know this childish behavior was wrong, but that’s aside from the point.  The point is that the system had flaws.  Why was I, Naseem, not taken account for?  I’ll tell you why because the merchant (Albertsons in this case) was not able to maintain our relationship, extend it and grow it.

You see there was a slight shift in the Albertsons and Safeway merger the mirrors what Robert was saying.   Something very subtle that I noticed not too long ago.  The self-checkouts!  They were all gone and the lines were ridiculous.  And I’m talking about the express checkout!  When it was finally my turn I couldn’t help but ask.  I was curious to know why they had made the switch.  The lady told me it had something to do with the merger and Safeway’s CEO is making some changes.

This speaks to me, and I’ll tell you why.  What Robert Edwards knows is that at end of the day the winner is going to be the one who provides the most value.  Robert understands something that Amazon needs to understand in order to succeed in the long run.  It’s that at the end of the day no matter what a human has the ability to provide more value to a consumer than any technology could ever.  Now what’s key to understand is that just because humans have the ability to doesn’t mean they always will.  This is why you don’t see any more self-checkouts at any Safeway of Albertsons anymore.

But Wait Don’t Forget that: Depth > Width, Always!

Now, this is where it gets interesting. Safeway’s trying to make some major changes, adapt and provide more value.  Safeway knows this now, and they know because they’ve been in the game longer than Amazon. That’s their only edge. They know more about the consumer because of insights gained through human interaction up until this point as a whole. Gained wisdom you could say. But now, on the other hand, you have Amazon who will now know much more in depth about a customer than Safeway.

Now as I mentioned in the information age, it’s always Depth > Width.

More depth means that merchants will be able to better guide and maintain a customer relationship more effectively. People can fall through the cracks whether it’s a regular customer all the way down to a thief. Guiding processes helps a business survive and thrive.

Amazon pioneered a model that has set the footprint for online e-commerce today. They know the depth game. With Amazon Go’s brick-and-mortar experience it’s definitely safe to say they now will have even more depth. Amazon is now positioned to be the new backbone of the brick-and-mortar customer experience.

The lucky one is not the one who learns a lesson through his own experience, yet the one who learns it through another’s. Surely that’s where wisdom lies.

That’s a saying in my language. Point is, Amazon: Learn to listen. Learn to delight the customer. Understand the human condition. Learn to look from other angles. And most importantly make moments matter. Amazon Go will change an industry, but Amazon you need to play the long game. The #1 Way to delight a customer is through real human interaction. I’m assuming soon, once the bugs are out, Amazon will start licensing out their patented technology for other merchants to use. Aside from SaaS (Software as a Solution/Service) fees, Amazon’s capabilities to track customers and gather market insights will mean more jobs. From behavioral phycologists to marketers, and even sales communicators.

 What could this look like?

People walk by the Amazon Go brick-and-mortar grocery store without lines or checkout counters, in Seattle Washington
People walk by the Amazon Go brick-and-mortar grocery store without lines or checkout counters, in Seattle Washington, U.S. December 5, 2016.

Now, this can and will look like a lot of things. Personally, I think we’ll start to see things like more brand reps. Innovative ways of delighting the customer. Maybe even sampling and ways or giving value before asking. Because yes, we will have many choices, so kinda like Robert said, the value is going to have to be compelling.

Take this for example:

You walk into your favorite grocery store and you’re greeted by your name. This alone is so big and can alone make someone’s day. A brand or store consultant also ask’s you how they could be of service to you. Whether that’s leaving you be or directing you to a certain aisle.

This consultant also lets you know of special’s and things that may be on sale just for you based on your buying preferences and habits. Also since there’s a surplus on sour patches and the merchant has learned its one of my favorites candies (I know…I got a sweet tooth), for being a loyal customer the merchant lets me know I can pick one up on the house as I go about my shopping. A small yet simple way to delight me.

You see if I’ve been loyal to a merchant and have benefited the business a deep learning/ machine learning AI can determine whether I should be rewarded to extend what’s referred to as “Customer Life Cycle Management”. If a merchant can make me feel special, unique, and significant then it touches the heart. Affecting the hearts of the people a merchant serves cultivates real brand loyalty. Giving value to a customer and providing a superior customer experience.

For marketers, this is going to mean a lot of what we like, depth. We’re going to have so much information that can be used for delighting. We’ll do this by positioning the right products and services, at the right times, in the most innovate of ways. Marketing from here on out will be much more one on one, and more personal than ever before.

Branding and Customer Loyalty: Anyone knows that at the end of the day, people buy from the people they like and trust. Brand’s will realize and are realizing that customers that are loyal are just simply better for well………everything. People buy into stories, visions, and experiences, not JUST products. Branding and customer loyalty will be the backbone of businesses and Amazon Go will level the plain field for modern day merchants.

Jeff Bezos, buddy you’re a genius. But dont forget, the key is to care.

2 thoughts on “Amazon Go? Forget them, Albertsons Has a Better Idea

  1. Naseem – I am a little confused. Are you saying that Safeway Will win out in the end by adopting some of Amazons software? Or are you saying that the safeway/Albertson’s System is toast? I personally Love the experience of Chatting with all the people in the store including check out, customers, people behind counters and so on. I take it from what you say that reps will be standing around to help. I sort of doubt that.

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    1. Good question Doug. Im not necessarily saying either will win or lose. At the end of the day Doug the merchant whether it be Safeway or Amazon that provides you the most value will win. Right now with the data Amazon will have about you (the average consumer) they will be best positioned to do so. With that being said Amazon’s whole business model is structured around licensing out there technology to merchants, like there eCommers platform. When everyone has Amazons technology in there stores and prices can’t get anymore competitive merchants will look for other ways to provide value. The have to continually innovative as Safeways CEO learned. The reason you love the experience of chatting with everyone at the store is it’s providing you value. No technology can ever compare to the potential ability of a human in terms of giving value to another human. As a Gen Z’er Doug I tell you, you will see brand or store reps in stores. Not necessarily just standing around, but representing brands and answering questions you may have. Also giving out samples kinda like Costco and chitchatting with you. Since these reps will know you, you preference, and other insights they can do more to have meaningful conversations. Doug what if the people you saw at the store that you love to chitchat with could pick up roughly where you guys left off ? Would that not be a much better experience?

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