I can’t stop thinking about Amazon Go.
If you missed it this past week, Amazon blew our collective minds with the unveiling of their rethink of the grocery store. I wrote, “if you’re a grocery store and aren’t worried about what Amazon is doing, you should be. With Just Walk Out, they are looking to utilize IoT, AI and mobile to extend their dominance from the online and in-home commerce world to the corner grocery store.”
How does this fit together with what else they’re doing in the grocery realm? I’d describe it as a strategy of ‘Dash & Go’, where they ‘Dash‘ towards the middle of the store filled with dry goods and commodities and then ‘Go‘ after what I call the “fresh edge”, around the perimeter of the grocery store where everything is fresh, artisanal, green.
This strategy crystallized for me when I read the following description of Amazon Go:
“We offer delicious ready-to-eat breakfast, lunch, dinner, and snack options made fresh every day by our on-site chefs and favorite local kitchens and bakeries. Our selection of grocery essentials ranges from staples like bread and milk to artisan cheeses and locally made chocolates. You’ll find well-known brands we love, plus special finds we’re excited to introduce to customers. For a quick home-cooked dinner, pick up one of our chef-designed Amazon Meal Kits, with all the ingredients you need to make a meal for two in about 30 minutes.”
That’s the fresh edge, folks.
When you look at Amazon’s Dash partners, you see a whole lot of packaged goods, whether that means bottles of fizzy drinks, cleaning supplies, or toiletries, etc. It’s the high-volume, sometimes boring stuff that consumers know they need and just want to make sure they have at all times.
Some have speculated Amazon Go is a proof of concept meant to showcase the technology to potential customers like, well, grocery stores. I disagree. Just Walk Out, the technology platform at the center of Go, is certainly interesting and something other grocery chains would want. But here’s the thing: I’m not sure Amazon is in the innovation business to help other grocery stores. While they may “lend out” their innovation in the areas of cloud computing and Alexa through as-a-service models and APIs, I can’t see them creating a massive reinvention of the grocery store concept for others to use without first trying to capture as much of this market themselves as possible.
Some may also wonder why I don’t see Amazon Fresh, Amazon’s grocery delivery business, as a “third leg of the stool” in this grocery strategy. I’m not ruling out that the delivery of fresh will some day become a very important business for Amazon, but you have to wonder why a grocery delivery business they’ve been working on for a decade hasn’t been scaled very widely yet. This tells me that they may realize home grocery store delivery, which has been a dream of Internet innovators since the days of Webvan, may not be the most efficient way to get food to consumers.
Lastly, I don’t think Amazon is done. They hint in the video (see below) they’ve been working on Go for four years, which makes you wonder what else they are working on. I’ve heard from multiple Amazon folks they have a bunch of new tricks up their sleeves in 2017 (one of which could be a “kitchen computer”), so there’s a good chance the company will blow our minds next year as well.