< Back to Blog

Amazon Go: Is this the future of retail?

February 17, 2019

In a 2018 report, PwC stated that ‘on average 14 shops are closing per day in the UK.’ Whilst this is a damning statistic for UK retail and epitomises the struggles of our highstreets, it depicts a contrasting landscape to those companies who have leveraged new technologies and are thriving in 2019 despite the challenging trading environment. In the midst of the doom and gloom surrounding UK highstreets, Amazon is flying in the face of adversity. After conquering the ecommerce world, it has entered the brick and mortar market and has secured a flagship retail location in London’s West End shopping district for its cashier-less Amazon Go store.

Amazon’s futuristic store has no cashiers or self-checkout machines; instead a customer scans a code on the Amazon Go app to enter, and is then tracked around the store as they pick up items. The items they leave the store with are tallied up and charged to their Amazon account. This innovative approach is possible due to recent advances in Artificial Intelligence (AI) and camera technology. The AI algorithms watch the various video feeds and identify who is picking up an item, and which item they are picking up, then, with the help of sensors on the shelves, items are added to customers' Amazon Go accounts as they pick them up - and delete any they put back.

Amazon have always been renowned for their innovative approach to business and have incorporated aspects of AI into many of its trading processes. What began as a niche second-hand book seller has developed into a global ecommerce juggernaut with the capacity to reshape retail as we know it.

Amazon’s move into physical stores comes as retailers in the UK battle against falling sales figures and crunch costs to try and compete with online competitors who can levy more efficient trading processes.

In an ever changing retail landscape, which has already led to the demise of many established brands, can retailers afford not to invest in new technology and risk becoming another one of the 14 businesses closing per day in the UK?

The foundation of Amazon’s success and their ability to launch offerings such as Amazon Go is due to a foundation of innovation and forward thinking, however equally important is its efficient and streamlined supply chain that facilitates the company’s innovative ideas.

Amazon’s success as a company has come in part from anticipating customers varied needs with a mantra of ‘start with the customer and work backwards.’ By seemingly stocking everything that any of us could ever want, they’ve diversified their product assortments and expanded the suppliers they work with. To do so they have created a streamlined supply chain capable of liaising with thousands of disparate companies all offering different products.

There are a selection of supply chain technologies available to retailers, such as Amazon, to support their trading processes.

 

  1. A supplier facing EDI solution enables them to easily transact electronic business documents with their vast array of suppliers, equipping them with the infrastructure to reduce manual data entry thereby increasing efficiency and reducing errors.
  2. Dropshipping is the process of selling a product without the responsibility of carrying inventory or shipping the goods, which instead are the responsibility of the retailers’ suppliers. By employing this flexible model, retailers can offer their customers a plethora of products from a multitude of different suppliers. It’s the varied nature of Amazon’s supply base which enables them to offer a worldwide marketplace capable of catering for every type of product, from books to bikes and everything in-between.
  3. A Vendor Managed Inventory (VMI) solution offers retailers the capacity to collaborate on inventory replenishment and ensure that they have the right products in the right place at the right time. Because retailers, such as Amazon, have thousands of suppliers, managing stock from each supplier across a network of countries and continents can prove time consuming. By entrusting their suppliers, particularly their key larger suppliers who supply the greatest number of items, to replenish their fulfilment centres they can streamline internal processes and ensure that they maximise sales by reducing out-of-stock items.

To stay competitive in today’s dynamic global market, you’ve got to be able to do business in a lot of different directions at once. But all of this gets very complicated, very quickly. TrueCommerce offer companies the capacity to do business in every direction. TrueCommerce is the most complete way to connect your business across the supply chain, integrating everything from EDI, to inventory management, to fulfilment, to digital storefronts and marketplaces, to your business systems, and to whatever comes next.