In South Africa only about 10% of retail shopping is done online as shoppers still prefer to go to malls to do their shopping. The worst part of this is often the queuing when it comes to paying for your purchases. Pressure has been put on retailers to find ways to ease these long queues.
Amazon is piloting a product (“Amazon Go”) which stops all queuing – you put your goods into the trolley and when you’ve finished you walk out the store, get into your car and go home.
How does it work? Watch this video…
Amazon has adapted the technology for driverless cars to the grocery store environment. Consumers open an account with Amazon and download an app. At the store they swipe their smartphone on a scanner as they enter the store. In the store, sophisticated technology captures what you put and take out of your trolley (if you decide not to purchase an item, it takes it out of your grocery purchase list). When you leave the store your Amazon account is debited with your purchases and you receive an online receipt.
Watch Amazon’s explanatory video (and read the FAQs) on its website.
Amazon plan to launch this in the first quarter of this year in the USA. Its sheer convenience will almost certainly make it a big hit with consumers. This means it will almost certainly be rolled out globally. It is difficult to know when it will reach South Africa but Amazon have a presence here.
Its impact (and “What about the workers?”)
Clearly large grocery outlets like Walmart will be affected and if it comes here so will Checkers, Pick n Pay and other grocers. The groundwork has been laid already – in September last year Pick n Pay started trialling a related concept in the form of self-service checkout tills.
A major attraction for retailers is that checkout staff and in-store packers will no longer be needed which is a substantial cost saving. The issue in South Africa is how will the country cope with more unemployment? The technology will almost certainly spread to warehouses and once again will involve sizeable staff reductions.
We are already seeing that business disruption technologies, such as Netflix, have a sizeable impact on consumers. It is extremely difficult to stop these technologies and strategies will need to evolve in South Africa to cushion the impact on less skilled workers.
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