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Amazon Go Just Killed The Customer Loyalty Card

by Simon Spyer on Dec 5, 2016 6:24:36 PM

Amazon Have Profoundly Disrupted Customer Loyalty. Again.

Amazon Go Just Killed The Customer Loyalty Card
 
Today Amazon introduced the world to Go - checkout-free store launching in 2017. Our as Amazon describes it 'Just Walk Out Shopping'
 
The disruption for retail is profound but particularly so for the humble loyalty card and for customer experience in general.
 
Let’s look at the implications.

How Amazon Go Works

To quote from Amazon
 
"computer vision, sensor fusion, and deep learning. Our Just Walk Out technology automatically detects when products are taken from or returned to the shelves and keeps track of them in a virtual cart. When you’re done shopping, you can just leave the store. Shortly after, we’ll charge your Amazon account and send you a receipt." 
 
It’s a brilliant example of true innovation happening at the inter-section of:
  • Desirability (human needs and values)
  • Viability (the business opportunity to deepen relationships and stretch the proposition into physical services
  • Feasibility (the reality of Amazon’s data and technology) 

The Impact On The Loyalty Card 

The only reason to have a loyalty scheme is if you don’t have customer data.
 
This was the challenge that faced retailers before the introduction of the Coop’s divi: once a retailer grows beyond a handful of customers being served by the owner/operator they have no real understanding of who is crossing the threshold and transacting with them.
 
This led to the loyalty card. A blunt tool with a clear value exchange: give us your personal details when you register and we will give you a loyalty card; you can use the card to earn points and redeem these for prizes and we can match your personal data to your transaction data and know who you are and what you do.
 
With the introduction of Amazon Go, the loyalty card becomes redundant.
 
Amazon knows exactly who is crossing the threshold (the video shows turnstiles that can only be opened by a swipe of a mobile phone).
 

The Impact On The Customer Journey 

In one swoop Amazon has delivered a seamless, friction-free experience that most retailers can only dream about.
 
For the customer, the proposition eliminates one of the critical moments of truth (whether it being self-scanning or serviced checkouts).
 
One can’t also help wondering whether there is a perceived element of trust that will resonate with consumers and also increase their sense of emotional loyalty to Amazon.
 

And The Impact On Retail In General 

Aside from a very clear move into physical stores, this must be a terrifying prospect for all retailers - and not just grocery retail.
 
It’s not too much of a leap to envisage how this technology could power powerful, positive experiences in non-food retail.
 
One has to assume that Amazon will knit together the on- and off-line worlds like no other to deliver a personal customer experience however the customer wishes to transact. And one has to also assume that they will deliver a high quality product at a highly competitive price.
 
Each transaction will build knowledge and Amazon can use this knowledge to deepen the customer relationship.
 
It’s difficult to see how many retailers could cope with this paradigm shift in the overall customer experience:
  • few have the technology first and computing scale of Amazon
  • few have the luxury of this being a non-core category where a view can be taken on margin
  • and even fewer have genuine customer-centrism at the heart of the organisation
This is a glimpse of the very near future. For many customers it will be a dream come true but for many retailers it will be a nightmare.
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This post was written by Simon Spyer

Co-founder & Insight Partner at Conduit, professional insight-monger, dad, lover of all sport and Spurs.

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