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The Amazon Affair: Part II

Dec 14, 2016
The Amazon Affair: Part II

Only 6 weeks ago, we wrote about the Amazon Affair. We explored how from humble beginnings only 20 years ago Amazon has grown into a tour de force of retail, marketing and year on year growth in profits.

Amazon has repeatedly changed and threatened traditional retail models, pushing its competitors to be ever more streamlined, efficient and original to keep up with their pace of transformation.

So why are we writing about them again?

This week the world has focused its attention on Amazon once more, as the behemoth announced it is trialling bricks-and-mortar stores that allow customers to buy their groceries without queueing, going to the check out or indeed even paying.

Amazon Go, dubbed as ‘the world’s most advanced shopping technology’ and offering customers a ‘Just Walk Out Shopping experience’, claims to use similar technology to driverless cars to give its customers the most streamlined, hassle-free shopping experience possible.

Reported by every major outlet for the past week, the announcement has caused a storm across social media, business commentators and the international press as people debate the merits, and pitfalls, of the new idea. 

The positives for brands

For many brands looking to market themselves to the consumer that is always on the go, wants instant gratification in every walk of life and is constantly on the lookout for the next technological revelation to make their lives easier, the release of Amazon Go will be seen as a pioneering move towards the future.

According to a Forbes article, Amazon Go is to retail what their one-click patent was to online shopping back in 1997, claiming they have ‘just reinvented the entire retail and payments experience.’

Fortune Magazine also sees the move as worthy of note, likening Amazon to ‘a computer virus: It probes, it examines, it learns. And then it attacks’. Although perhaps not the kindest analogy, the underlying notion that Amazon is continuously pushing boundaries and innovations based on consumer and industry insights is sound.  

Speaking to Internet Retail, Perry Krug of database specialists Couchbase argued that;

‘If Amazon Go succeeds, it will be the latest example of the digital economy, where customer experience is put above all else. Just as Uber revolutionised the taxi industry by focusing on what the passenger wanted […] so Amazon is setting out its stall with IoT in retail.’

A cautionary tale 

Yet despite the hype surrounding their latest idea, other commentators have highlighted a number of challenges associated with the concept and argued that perhaps too much technological change can have grave repercussions for society.

One argument against the roll out of Amazon Go-like stores is the impact it could have on consumers in social terms. The Guardian argues that in a world where already social interactions are limited and all basic functions of life can be carried out online, the opportunities for brands to interact with their consumers on a human level are rapidly deteriorating.

With insights still showing that customers value an element of personalisation and human touch to their marketing and brand relationships, striking a healthy balance between convenience and contact could prove challenging.

A perhaps longer-term challenge presented by Amazon Go is its potential to change the demographic framework so frequently used by marketers to inform their strategies. Although there are inevitable pros and cons to using demographic statements as insights, if the trend towards automation and IoT continues, it has the potential to overhaul categorisation as we know it.

While automation means convenience to some, to others it means a threat to their job prospects. Forbes contributor Panos Mourdoukoutas has argued that increasing technology could eventually make minimum wage labourers superfluous, as narrow-margin organisations look to cut the costs of employing workers. 

The Guardian claims that far more than simply challenging retailers, Amazon Go ‘raises serious questions about the future of work and the changing nature of the economy more generally.’ When this restructuring begins to create new segments of workers, ever more globalised employees and pushes the importance of “human qualities” such as creativity, critical thinking and problem solving into the centre of recruitment, marketers may find that their demographic models no longer represent reality.

Just as we have argued that automation is already beginning to shake up marketing, it seems that Amazon Go could be the next leap forward for retail, brands and the digital economy. Marketers should be watching closely, as each step taken by Amazon will inevitably impact upon their methods, strategies and relations with consumers.


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