3amazonFor brick-and-mortar retailers it is increasingly difficult to keep their customers in the long term, as technology promises to make for convenience and consumers expect personalized and outstanding shopping experiences. Today’s consumers prefer, for instance, receiving vouchers and special offers directly on their smartphones, instead of carrying around loyalty cards. In fact, mobile devices are an integral part of their purchasing processes by now.

Nevertheless, the most personal shopping companion still seems to be a bit underestimated as carriers of mobile customer loyalty programs. Probably, because there are only a few global providers of mobile wallets around that have really understood the needs of merchants and users.

Anyway, the use of mobile channels is not a "nice to have" anymore, but a must, and the U.S. retail giant, Amazon, is again impressively pioneering the future of shopping.

No cashiers, no lines, no need to bring credit cards or cash

Amazon takes advantage of the peculiarity that customers increasingly use smartphones to prepare for their purchases and carry the devices everywhere around. The retail expert makes use of the mobile phones of their customers and knows that customers become regular customers when they perceive real added value, such as e.g. relevant advanced information, exclusive offers or rewards after the shopping, special deals and vouchers, personalized and relevant offers as well as in general a convenient and pleasant shopping experience.

Due to advanced technology, Amazon can reach customers a much more targeted way with individually suitable offers and increase transparency with state-of-the-art service offers.

Clearly, online shopping is at the tipping point, due to shifting consumer attitudes and innovations at the brick-and-mortar level, and Amazon unveils in the latest sign of change a progressive concept grocery store that offers a no-checkout experience.

All that’s needed is an app that is used by shoppers in-store, and Amazon’s willingness to invest a significant budget to keep the project running, as the user behavior on mobile is usually changing very fast. Of course, keeping the app up-to-date is just as important as intuitive, uncomplicated handling and minimal loading times - especially when shopping must be fast.

Of course, shoppers not only have to have the Amazon Go app installed on their smartphone, but need an Amazon account as well to shop in such a store, which is currently in Seattle in beta but plans to open its doors to the public early next year.

Perceiving the convenience and additional benefits immediately

The shopping process itself seems to be easy: Consumers will be able to enter a store via the Amazon Go app (most likely with a bar code in the app), pick up the things they need and then walk out of the store.

Actually, the Seattle store is just one of several grocery store formats that Amazon plans to explore, according to eMarketer. The other two concepts combine online ordering with pickup, eliminating the delivery option—one of the costliest aspects of online grocery shopping.

“The move to brick-and-mortar is necessary for Amazon to compete—and perhaps succeed—in the grocery retail arena,” said eMarketer analyst Patricia Orsini. “And they are serious about winning in this space, evidenced by the fact that Amazon [is trying out] several different shopping formats.”

Another Amazon concept is that a shopper could place an order online, drive a few miles to a store where the order is waiting and pull in to a designated parking spot where someone would load the groceries into their car. “This is where the real convenience of online grocery shopping lies,” Orsini said. “It also solves two other issues related to online grocery shopping: shoppers can receive their order within a couple of hours, and there are no delivery charges to increase the cost of doing online shopping.”

This click-and-collect model of shopping has already gained a lot of traction in Europe and starts to gain steam in the US, too. How it will gain momentum in Southeast Asia, we will see, considering Amazon’s launch in Singapore early next year. Not only is the city state easy to service from an operational perspective, but the customer culture and spend is more closely aligned with Western markets where Amazon has already striking successes. Not to mention that Singapore represents a vantage point to enter adjacent emerging markets and can be a convenient first landing point and headquarter for the region.

By Daniela La Marca