Amazon is currently the most valuable and largest internet-retailer in the world. Since the company’s inception, it has transformed the way we shop and its presence around the world is only getting larger.
This transformation has been a result of the large spending on R&D and the eventual incorporation of technology the firm has seen in the past decade. Currently, Amazon has solved one of the biggest ‘first-world’ problems facing day-to-day consumers – shopping queues!
According to The Fact Site, people spend approximately 5 years of their lives standing in queues and Amazon has taken on the initiative to revolutionise the retail industry and improve time-efficiency around the world.
Amazon has therefore created a new retail experience and opened a corner store called Amazon Go, where customers can pick up their groceries and walk out without having to queue up and pay at the checkout. This technology has the potential to be a real game changer for retail businesses around the world.
What makes Amazon Go so unique is its efficiency and simplicity. Customers download the Amazon Go app, tap the barcode onto the scanner as they walk in, pick their products and then walk out. Upon exit, the customer is charged from their Amazon account.
The technology works with in-store sensors, which track the items they’ve chosen in a virtual shopping cart.
Amazon, with a market capitalisation of almost £300 billion has proclaimed that the new service was “the world’s most advanced shopping technology”.
The first Amazon Go store opened in Seattle late 2016 and the company has highlighted plans to open a store in the U.K. in 2017.
However, the question that arises is, does it disrupt the business of current retailers and grocers or does it motivate them to push for innovation and become more capital intensive. Another question that arises is, what happens to jobs if Amazon Go becomes the next Tesco/ Sainsbury’s? How many thousands of potential jobs would have to be given up to pave way for this innovation?
The technology that Amazon has developed has the potential to be incorporated by hundreds of thousands of retail businesses and experts are studying the impact this is likely to have on jobs. If Amazon Go becomes successful and continues to grow in the U.K., It could have a negative impact on employment, as more retailers will be forced to match its convenience and possibly low prices due to the increased competition.
According to the British Retail Consortium, the UK retail sector could see job losses upwards of 900,000 within the next decade if the rate of technological change continues to grow on a year-by-year basis, which is what is currently happening.
However, this technology could also have positive effects on businesses.
Deloitte’s survey reveals that technology has created more jobs than it has destroyed in the past 140 years, although manual labour jobs have been effectively displaced.
Capital-intensive and innovative businesses will need tech experts to install sensors and connectivity services while data analysts will have to handle all the data collected by the sensors.
Nonetheless, this sort of ‘disruptive technology’ begs the question; what are other businesses and retailers doing? There are numerous large retailers, particularly in the U.K. who could have innovated their stores by not requiring to queue and pay.
These businesses should realise that we live in a time where technological advances enable significant changes to goods and services and build newer and more informed relationships between consumers and businesses.
Amazon is the perfect example of how investing in innovation and taking advantage of such unique opportunities can contribute to the growth of business and other firms should follow their lead by example.
The problem is, companies are simply not investing enough and accelerating their future growth. Investment is required for the company’s core products, systems and to enhance the consumer experience and Amazon is doing exactly that. The way technology has changed over the years has allowed the world to grab hold of an enormous opportunity to transform business. However, although innovation comes at a cost, it eventually pays off it consumer demands are met. Therefore, companies need to capture the gap in the consumer’s experience, through investment in capital and research.
Disruption through technology is happening at a pace faster than ever and companies failing to adapt to this need to address it as soon as possible before they become irrelevant in the coming years.
Amazon’s technology is truly be a game changer for the retail industry however, they will need to garner the trust from their customers regarding the reliability and reliance on such advancements, even if jobs are lost in the process. We will have to wait a few more years to find out the real impact of this technology and how it disrupts the rest of the businesses globally.