Strategic Management

Individual Assignment I

Article Analysis on ‘Amazon Go’

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 Introduction

The title of 'disruptor' has always been a favourite of Amazon's. Amazon has always strived
to provide its consumers with ease and best-in-class features and technologies. In 2018,
Amazon launched its first Amazon Go shop, a physical "store of the future," in Seattle,
continuing the tradition of becoming the disruptor.

It's not like every other convenience shop next door; with Amazon's cutting-edge innovations,
it's the store of the future. This store transforms the retail experience by merging technology
with convenience. It's a digital-era shop. There are no cashiers or registers in sight, and there
are no long lines for billing; instead, the whole shop is run by a combination of sensors,
machine learning, and computer vision. Amazon is aiming to incorporate the idea of "grab
and go," saving shoppers hours lost waiting in long queues.

Amazon is seeking to change the discount industry and achieve a strategic advantage by
introducing the Amazon Go website.

What is the Strategic Issue?

The retail industry has long struggled and strived to increase the speed of checkout and
payment. To speed things up, the industry has recently come up with a range of solutions,
such as self-service checkouts and buy online pick up in store (BOPUS) services. But, in
order to upend the game, Amazon devised a compromise that no one else had considered: no
checkout at all.

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Amazon Go is Amazon's first checkout-free convenience store, expected to provide the
public an unrivalled in-store shopping experience.

Customers check the Amazon Go smartphone app as they enter the shop, select items from
the shelf, and walk on out the door. Checkouts, card sales, and bagging are all slated to be
eliminated by Amazon Go stores.

Amazon is in town, attempting to achieve a competitive edge by disrupting the way grocery
stores operate. However, Amazon's broader approach here could be to improve its brick-and-
mortar presence. With Amazon's strong online presence, improving its brick-and-mortar
presence could be more advantageous and part of the larger strategy.

Amazon is now attempting to be an industry disruptor, pursuing success in the development

of emerging technology. Amazon also has good positioning and market equity with its
consumers, making it easier for Amazon to launch new products.

So, through the recent Amazon Go shop, Amazon is attempting to be an industry disruptor
but still maintaining a solid footprint in brick and mortar stores, offering stiff competition to
already existing competitors with its new innovations and technologies.

What insights can be drawn?

Amazon is clearly attempting to change the shopping industry with the upcoming Amazon
Go shop. Since Amazon is the largest e-commerce firm, it has a high brand equity with
consumers, so when it tries something different, customers accept it with open arms. It
remains to be seen if Amazon Go stores will take over the planet. However, there are some
lessons to be learned from Amazon's transfer. The following are some examples:

• User Experience: Amazon is attempting to make it as simple as possible for its consumers.
The idea of taking products off a rack, placing them in a cart, and walking out solves one of
the most common problems that shoppers face: the checkout process. It was a satisfying
experience for many shoppers, when 20-40% of the time spent in a supermarket is spent
standing in lines or paying. Amazon made it super-easy for shoppers to do grocery shopping
by combining technology with ease.

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• First-mover advantage: Amazon sought to achieve the first-mover advantage for the new
Amazon Go store. Through its new Go stores, Amazon is gaining technical clout. Other firms
such as Alibaba, Lotte, and Jack & Jones attempted to follow in Amazon's footsteps, but their
technology was not as advanced as Amazon's. Amazon has an advantage over its rivals
because of its first-mover advantage and market equity.

• Customer-centric Innovation: Amazon is always working to improve its offerings and

experiences, but it still has the needs of its customers in mind, as seen by the Amazon Go
shop. It does just what consumers want: simply grab and go, with no cues or hassle.
Furthermore, consumers' faith in Amazon makes it simple for them to implement these
technologies. Amazon thinks about the flaws of these technologies, tweaks them, and
enhances the overall experience.

What academic concept can be linked?

Amazon is concentrating its resources on food and convenience outlets. They are seeking to
modify the customer's whole shopping experience. Amazon's purchase of Wholefoods
indicates that the e-commerce giant now aims to overtake physical grocery outlets. Amazon
is now attempting to deploy creative approaches to making the whole retail process easier for
consumers through the Amazon Go shops.

The academic concepts which can be linked to the Amazon moves are as follows:

1. Disruptive Innovation: Amazon Go shops are causing havoc in the supermarket and food
industries. Amazon is attempting to deliver on the needs of its customers in order to improve
their shopping experience. Amazon is seeking to develop itself in the brick-and-mortar
shopping market with its best-in-class technologies and creativity. Amazon is attempting to
expand its market by using technological technologies. They are entirely reinventing how
customers buy, granting them a strategic advantage over their rivals.

2. First-mover advantage: Amazon Go is a technology-driven convenience store. Amazon is

attempting to meet the demands of customers by having no lines, cashiers, or registers
anywhere in the shop. With its cutting-edge technologies, shopping at one of Amazon Go
stores is a breeze, and customers save time as well. In general, customers must wait in long
lines for payment, and Amazon hoped to address this issue with its new Go stores.

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3. Broad Differentiation Strategy: Broad differentiation strategy is a competitive strategy
used by businesses to differentiate their products by including distinct advantages and
features that set them apart from their rivals. Amazon is transforming the shopping game for
the Amazon Go shop, which use cutting-edge creativity and technologies. Since there are no
cashiers and no cues in these shops, shoppers can have a more pleasant shopping experience.
The principle of no-cue shops, as well as the use of computer vision and machine
intelligence, set these Go stores apart from their rivals, offering a degree of distinction that
their competitors ignore.

Summary

The Amazon Go shop is the store of the future, using cutting-edge technologies to provide
shoppers with ease while still distinguishing Amazon from its rivals. Amazon Go stores were
created with the goal of focusing on consumer desires and doing just what they want.
Furthermore, these outlets not only help Amazon distinguish itself and achieve a strategic
advantage, but they also help the e-commerce giant develop a solid footprint in brick-and-
mortar stores. Amazon is poised to overtake offline stores after dominating the e-commerce
market, keeping this approach in mind and establishing a large footprint. Amazon created Go
stores and purchased the WholeFoods grocery chain.

Only time will say if these stores will help Amazon's domination over brick-and-mortar
stores.

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 Recommendation
While Amazon Go stores are generating a buzz in the industry, there are several strategic
places where Amazon can concentrate its efforts, including:

• To improve its offline footprint, Amazon should extend the scope of these Go stores and
expand the range of items available in these stores.

• Amazon Go stores use monitoring technologies, which can raise questions about data and
privacy among customers.

• About 3.5 million cashier positions are at risk as a result of these automated stores, which
can cause a reaction from the public.

• Although Amazon is attempting to provide consumers with a hassle-free shopping

experience with its Amazon Go shops, Amazon must bear in mind the advantage or
advantage these stores provide in exchange for the investment they need. Due to high
investments and low profitability, these stores can prove to be a poor decision by Amazon,
resulting in significant losses.

References
• Wingfield, N. (2018, Jan 21). nytimes. Retrieved from The New York Times:
https:// www.nytimes.com/2018/01/21/technology/inside-amazon-go-a-
store-of-the- future.html

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