Amazon fails with cashierless supermarket – what’s next?
Amazon has surprisingly not achieved overwhelming success in stationary retail in recent years. Its “just walk out” cashierless technology was supposed to revolutionize shopping in the U.S. supermarket and launch a major expansion in brick-and-mortar grocery. However, the company had to spend about $720 million in the fourth quarter of 2022 to scale back its grocery business and initially abandoned its brick-and-mortar expansion.
According to Richard C. Geibel of the E-Commerce Institute in Cologne, Germany, the failure of the strategy is not a clear indicator of right or wrong, but rather that there is not yet enough acceptance of cashierless systems. Amazon continues to experiment with assortments, prices and different checkout formats to find a successful strategy for brick-and-mortar stores.
Amazon CEO Andy Jassy announced that the company plans to “go big” with a new format in 2023. According to Geibel, Amazon has so far often lacked the personal shopping experience that big luxury fashion brands offer, even though the company has the latest technology, which is a key driver of success.
The compelling customer experience as a social component of shopping should not be underestimated when shopping. During the Corona pandemic, supermarkets have returned to being face-to-face meeting places and online grocery 2021 has accounted for only 2.7 percent of total sales in Germany.
Shopping in fashion stores is designed to offer a special buying experience. Customers can order via the Amazon app if the garment they want is not available in the store. “Amazon understands that integrating online and offline is about creating unique customer experiences,” Geibel says.
While brick-and-mortar supermarkets are challenged but not threatened by online grocery, fashion stores have a better chance of complementing the online experience. They can enhance the shopping experience by adding a personal touch and offer a social component. With plans to open fashion stores that complement the online experience, Amazon is showing that it recognizes the importance of physical stores.
The full article on this area, which appeared on Capital Online, can be found here.
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