Amazon Go Impacts Mobile Payment Industry

Mobile payments are changing for good — thanks to Amazon. With the launch of Amazon Go, the “newest concept enables shoppers to enjoy the maximum convenience of shopping without the need to stop and check out”.

 

 

This is a total game changer for mobile payments. We repeat: a total game changer. Being able to walk into a store, pick up a latte and walk out — without having to check out at the register takes convenience to the next level. Say bye-bye to the dreaded long lines and the finicky self-checkout scanners. The idea of “walkout shopping” creates an environment where instead of spending shoppers quality time in-store, they can conveniently tackle their shopping list without the hassle of actually waiting and paying in line. By downloading the free Amazon Go mobile app, the shopper’s app will be scanned, they can shop, walk out, the total amount spent will be deducted from their account, and they will be emailed an itemized receipt for their purchases. Pretty simple, right?

 

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It’s quite obvious that this technology will “revolutionize” the shopping experience and will serve as a role model for other industries. As Amazon Go hits the mainstream market, we got a few Passport team members to weigh in on its debut:

 

Bob Youakim, CEO:

The process of Amazon Go will completely revolutionize the way we transact and will extend to other industries beyond merchandise. Amazon Go is more about improving the customer experience for mobile payments. When purchasing merchandise or services, customers want a seamless journey with as little friction as possible. By turning the table over, Amazon reimagined the possibilities of removing the kiosk.

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This concept can apply to other environments in the way we consume services. If you take parking and transit, for example, and breakdown how one has to transact with a city in getting from point A to point B — the experience is very fragmented with multiple interfaces requiring individual payment. The more modes in your journey (ride share, bike share, parking, riding the bus or train) the more friction is introduced. If the Amazon Go concept was applied, users would be able to leverage all modes of transportation that cater to their needs without having to figure out how to pay at every entry point. At the end of your trip or on a monthly basis, you would receive an invoice detailing out the services used and your bill.

 

Daniel Bliley, VP of Marketing

 

Amazon has been pushing the limits of innovation for some time now. Whether advanced warehousing capabilities, drone drop-offs, or re-order buttons, they are creating amazing user experiences. Amazon Go is a landmark idea that could reshape the entire retail concept. They’ve attacked one of the most frustrating parts of shopping–the lines. People complain about lines regardless if they are at the amusement park, the grocery store, or the parking meter. Removing that obstacle could lead to increased business and more satisfied customers.

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What is also interesting is that they are betting on the idea of trust and technology. Trusting that people will use the grocery stores as they are supposed to and trusting the technology to govern the store, as well.

 

Several retailers tried to alleviate pain points by having store employees come up to you and offer check out services. This takes it one step further–your phone is your payment option and your check out point. It’s brilliant and it pushes everyone to think about how to make experiencing your brand as easy as possible.

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Michael Scully, Chief Product Officer

Amazon Go is an example of solving user pain points and enhancing business performance through user interface design.  No line means a step change in convenience for users, which, in turn, will undoubtedly result in more throughput and higher inventory turnover for retailers.  

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Traditional cashier service is a user interface.  Self-service kiosks are user interfaces.  Amazon Go has been able to streamline the traditional shopping experience by eliminating the need for the user to actively participate in the checkout step (or to even wait for the retailer to handle it).  Extremely sophisticated technology, fully behind the scenes, has made the user interface at this step in the customer journey disappear.

 

The excitement around Amazon Go reflects a universal recognition of unlocked value in a frequent interaction that has been hidden in plain sight. At Passport, we similarly get excited about discovering new opportunities for value creation by reimagining experiences around transit and parking that have long been taken as status quo.

 

Mike Hulthen, VP Engineering

 

The real innovation or motive may not be the “no line” concept.  While an issue in the U.S., as most of our retailers focus on customer service via customer interaction, the concept of bagging your groceries and walking out the door has been active in Europe for over 10 years in around 2000 stores. With “scan and go” systems, a consumer scans products and places them in their carts (trollies to them) and basically walks out at the end of the experience.  This works very well in Europe because of many factors such as the teller only scans the products and the consumer bags (or re-totes) the products anyway.  

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This is extremely useful for “big” basket trips.  The Amazon video focuses on small baskets.  Amazon does have some amazingly interesting technologies, in the fact that the consumer does not have to scan but literally just grab and go (for those old schoolers, very similar to IBM commercial about RFID). The sensing and computing power is outstanding.  It looks like they might be targeting small format stores first, competing with convenience, like drugstores and small market types. We could discuss the pluses and minuses later (shrinkage, loose product, variable weight items, number of items (4,000 vs 40,000 or more for normal store), but I wonder if this is really about competing in low margin grocery game or a Trojan horse and it’s all about the payment platform.

 

Amazon has been trying to gain a foothold in the payment market since launching Amazon Payments in 2013.  Amazon Payments has struggled to gain market share, but they could license or provide the technology to other retailers in exchange for using Amazon Payments, which gives Amazon access to huge payment flow.  Remember of the $5T US retail sales, less than 9% are down online, in fact the total gross online sales is only on par with Walmart sales. I know line busting is great, but think about what kind of revenue that generates and how that might be more strategic than just competing in the low margin grocery business.