Grocers are running to catch up to Amazon Go’s “pay and just walk out” store model. Some like Tesco are adding similar over-head camera technology to automate scanning. Others such as Kroger are piloting “Scan, Bag, Go” technology that relies on customers to scan products as they shop which also eliminates the checkout line.
Marketers in many industries look at Amazon and what they see is that their relentless focus on convenience has created habitual use of many Amazon branded properties. And that habitual use has translated into market dominance. This has become a real driver for grocers and other retailers to implement cashierless technology on the assumption that the increased convenience of avoiding the checkout line will boost customer loyalty as well as reduce their payroll costs.
Kobie’s research shows that habit is a form of emotional loyalty. People who have habitual loyalty to a brand claim to feel an emotional connection to the brand – just ask a Prime member how they feel about Amazon. Customers who feel emotional loyalty to a brand will buy from that brand even when they don’t have the lowest price. When it comes to pricing in the grocery sector, Amazon is not always the cheapest option.
Amazon Go stores can provide a similar level of convenience that customers enjoy with Amazon digital experiences. Hundreds of overhead sensors detect what has been taken from each shelf and charge those items to the shopper’s Amazon account – no scanning required. You can visit on a lunch break, grab a fresh meal and head out in 15 seconds – the Amazon Go app will tell you exactly how many seconds it took you just to reinforce how convenient the experience is.
However, retailers who assume that all they need is to roll out similar cashierless technology are entirely missing the point.
The first time a consumer tries any new technology, it is not familiar. It is not comfortable. And therefore, it seldom feels convenient on that first try.
Amazon understands this in great detail. They are known masters of test and learn rollouts. If you are looking to compete with Amazon, you’ll have to take a page from the company’s book – and realize that their book has multiple chapters.
When Amazon Go first opened, customers had to download a special Amazon Go app to enter the store. This discouraged a lot of potential shoppers and added a twist on their tagline of “Just Walk Out”– potential customers did walk out.
Fast forward several months and you can enter an Amazon Go using the familiar Amazon Shopping app that most people already have on their phones. Now that Amazon has eliminated the need for the customer to download a new app and enter credit information, new customers can experience Amazon Go using something that’s already familiar to them. A new habit can be created.
Not Truly Cashierless After All
For customers who still hesitate at the automated gates at the front of the store, there is an Amazon employee who looks to be re-stocking the store. Their script is “Guests first, tasks last.” This Amazon representative will cheerfully show you where the Amazon Go code is on the Amazon Shopping App or help you through the download process. They forge a human connection to make an unfamiliar experience more comfortable. The employee can reinforce the convenience of the experience thus jollying the customer to build another habitual tie to Amazon.
That doesn’t mean you need to copy Amazon’s every move. In fact, Amazon may not own the monopoly on the pay-and-go store model much longer. Kroger’s Scan, Bag, Go technology is more intuitive that previous attempts to get customers to scan their own groceries – customers simply pick up a lightweight scanner to carry through the store. Once familiar with the experience, customers can choose to use the app version if they prefer. Scanning as you put items into the cart is easier than having to pull all the items out at the exit and scan them. Kroger’s solution works in the larger footprint of most grocery stores where Amazon’s large format approach has been delayed several times. In the meantime, Kroger is busy building habitual behaviors to keep their current customers loyal.
Retailers must create experiences that lead to emotional loyalty
Amazon’s clear objectives to expand in groceries puts pressure on other retailers to accelerate innovation. Establishing convenience-driven habits is a powerful loyalty strategy that can even overcome reasonable price differences. Best of all, experiences are far harder for your competition to match than running yet another price drop. The trick is to help your customers feel that the new experience is comfortable and familiar as well as convenient.