NAME: Chetan M.

PARADESHI
CLASS: 2ND SEM MBA
SECTION: ‘B’
SUBJECT: INNOVATION MANAGEMENT
REG NO: 22M01017

Innovation OF Amazon Go
Amazon Go:
Amazon Go is a revolutionary concept that utilizes advanced technologies to eliminate the
need for traditional checkout processes in retail stores.
You enter through the doors and embark on a journey that feels like a glimpse into the
future. Cameras and sensors elegantly track
your movements, while advanced algorithms
work tirelessly to understand your choices.
What is Amazon Go?
Amazon Go is a revolutionary retail store
concept introduced by Amazon in 2018.
It represents a significant shift in the world
of grocery shopping, as Amazon explores
new ways to enhance the shopping experience for its customers. While Amazon had already
been investing in grocery shopping through services like Amazon Fresh and Prime Now, they
took bolder steps with the acquisition of Whole Foods in 2017 and the subsequent
introduction of Amazon Go in January 2018.
Amazon Go, located in Seattle, offers an unparalleled and effortless in-store grocery
shopping experience. Customers can enter the store by simply scanning the Amazon Go app
on their smartphones, eliminating the need for traditional checkout processes. Once inside,
they can immediately begin their shopping journey without any delays.
The magic lies in the simplicity of the
process.
Shoppers can freely browse the store,
select the products they want, and place
them directly into their bags. When
they’re done shopping, they can simply
walk out of the store without having to
touch anything or go through a traditional payment process with a cashier or a POS
machine.

The success of Amazon’s Go

The profitability of Amazon Go can be seen through the impressive revenue it generates.
Analysts have studied the customer traffic at Amazon Go locations and found that, on
average, there are approximately 550 customers per day. This translates to an estimated
annual revenue of around $1.5 million for each store.
To put this into perspective, traditional convenience
stores of similar size typically generate just over $1
million in revenue according to data from the
National Association of Convenience Stores. This
indicates that Amazon Go’s revenue outperforms
that of regular convenience stores.
These figures highlight the strong profitability of
Amazon Go’s innovative approach to retail. By
eliminating the need for traditional checkout
processes and embracing advanced technology,
Amazon Go stores have created a shopping
experience that attracts a substantial number of
customers and drives significant revenue. The success of Amazon Go demonstrates the
potential for checkout-free models to thrive in the retail industry.
Innovation In Amazon Go

Just Walk Out Technology:

Amazon Go stores are equipped with a combination of computer
vision, sensor fusion, and deep learning algorithms to enable a cashier less shopping
experience. Customers scan their Amazon Go app upon entering the store, and the system
automatically tracks the items they pick up or put back on the shelves. When customers
leave the store, their Amazon account is charged for the items they took, and a receipt is
sent to their app.

Smart Shelves and Weight Sensors:

Amazon Go utilizes smart shelves that are equipped
with weight sensors. These sensors detect when a customer takes an item from the shelf or
puts it back. The system updates the virtual cart accordingly, ensuring accurate tracking of
the items being purchased.

Seamless Shopping Experience:

The
convenience of Amazon Go is that customers
can walk in, grab the items they need, and
leave without going through a traditional
checkout process. This eliminates the need for
waiting in lines, making the shopping
experience more convenient and time-
efficient.

Advanced Data Analytics:

With its sophisticated technology, Amazon Go can gather vast
amounts of data on customer preferences, shopping patterns, and inventory management.
This data can be used to optimize store layouts, product placement, and inventory
replenishment strategies to enhance customer satisfaction and operational efficiency.

5 Reasons Why Amazon Go Is Already The Greatest Retail Innovation Of The Next 30 Years
Reason #1 – Math

Physical stores still dominate retail. Despite the pandemic, which forced everyone to shut
their doors and to order more goods from e-commerce than ever before, physical stores
didn’t go anywhere. They still make up 60% to 70% of overall retail sales.

In contrast, something like the metaverse stands more likely to take a slice out of e-
commerce sales than it does out of physical stores. Therefore, when attributing something
as “the greatest retail innovation of the next 30 years,” it is important to keep the base of
sales that the technology will impact in mind.

Reason #2 – It creates a better shopping

experience

Amazon’s JWO technology just makes

shopping easier and more convenient, plain
and simple.
How it works is so intuitive in its design – customers take out their phones, scan a barcode
to enter a store, take whatever they want off the shelves, and just walk out and pay
electronically, like they are getting out of an UberUBER +0.4% or a LyftLYFT -1%, without
ever having to stand in line again.

Reason #3 – It leads to better omnichannel operations

One point oftentimes left out of the discussion of JWO technology is that it is, in reality,
about far more than the checkout-free experience. It is also about streamlining the
retailer’s store operations.

With cameras in the ceilings capturing everything

that is going on in a given store, the technology
platform gives unprecedented real-time visibility to
inventory, at all times. In layman's terms, this
statement means that retailers can be more
confident in their inventory levels on shelf and also
be more secure in knowing if that inventory
happens to be in the right place to maximize sales.
Studies show that inventory accuracy in physical
retail stores averages between 60% and 70%.
Whereas with JWO technology, to operate
efficiently, that figure has to be in the high 90s.

However, there is another benefit from improved inventory accuracy that goes far beyond
just more accurate inventory counts and more assured inventory placement – namely,
enhanced omnichannel capabilities.

Reason #4 – It better aligns supply to demand

Going back to my ECON 101 days, economies are most efficient when supply is
appropriately matched to demand, and that is exactly what can happen inside of an
Amazon Go-style store relative to any other physical shopping experience.

By knowing what is on shelf at all times and through the use of electronic shelf labels,
retailers can see what inventory they have on shelf and adjust prices accordingly. Have too
much inventory? Then they can mark items down or place them on promotion. Too little?
Then they can also raise prices in real-time.

Net/net – the whole thing should mean more

goods in the hands of people when they need
them most, and oftentimes at even better
prices than they would get normally, too.

Reason #5 – It creates better advertising

relevancy
Finally, the last reason why JWO technology is so powerful is that it digitizes a retailer’s
understanding of the physical store much in the same way that retailers currently
understand e-commerce.

In e-commerce, retailers know every page their customers browse, every item they add to
their carts, which items they actually buy, and so on and so on. In physical retail stores,
retailers know none of this information. All they know is what happens at the end of the
experience as items are rung up at the till.

JWO tech changes the dynamics of the

game because it knows everything a
customer does in a physical store, e.g.
what aisles they go down, what items
they pick up off the shelf and don’t buy,
and even how long they might take to
look at the local Sunday circular on
display in the entry vestibule.

Final thoughts

So there you have it – better operations, better pricing, better relevancy, and an overall
better experience bolstered by math on the side of progress.

While the preceding sentence may sound like the tagline to a Papa John’s commercial, it
should be taken as seriously as a heart attack because the retail industry will be hard
pressed to find another retail innovation that checks as many boxes as Amazon’s JWO tech
does.