New retail options Amazon Go and Cargo play to consumer demand for speed, convenience

By Elizabeth Crawford contact

- Last updated on GMT

New retail options Amazon Go and Cargo play to consumer demand for speed, convenience

Related tags: Venture capital, Convenience store, Amazon

The launch of Amazon Go and a separate $5.5 million infusion of seed preferred financing into Cargo’s “in-car commerce platform,” underscore how quickly the grocery channel landscape is changing and the need for brands to take an omni-channel marketing approach.

They both also speak to shifting consumer values that prioritize speed and convenience over endless options – a change that likely will increase competition and eventually could squeeze out me-too products or brands without distinct benefits.

For example, Amazon Go, which opened in Seattle Jan. 22, promises to be a “new kind of store with no checkout required,”​ – saving consumers time and patience they typically spend waiting in line to pay at traditional brick and mortar stores.

Amazon explains that its “checkout-free shopping experience is made possible by the same types of technologies used in self-driving cars: computer vision, sensor fusion and deep learning,”​ which combined allow the retailer to automatically detect when products are removed or returned to store shelves.

When shoppers remove an item they decide they want to keep, they simply drop it in their shopping bag or stick it under their arm and walk out through automatic gates akin to those at a public transportation station.  Shortly after leaving the store, Amazon will charge grocery shoppers’ Amazon accounts for the amount of the total purchase through a required, but free, Amazon Go app on their phones. The app is required to gain access to the store.

The store’s small 1,800 square foot floor plan also “is conveniently compact so busy shoppers can get in and out fast,”​ according to Amazon, which adds it will have ready-to-eat meals, grocery essentials and its own brand meal kits – all of which speak to saving consumers time.

But such time saving measures and tight space means there isn’t much room for redundancy – likely increasing pressure on products to meet velocity and sales targets to remain on the shelf.

Could time-savers become time-takers?

The emphasis on time-saving also could be a sticking point for Amazon’s technology, suggested Greg Ng, VP of digital engagement at PointSource, a Globant Company.

“We can expect Amazon Go’s cashless, cashier-less capabilities to be helpful for consumers when shopping for quick trip items, such as milk, eggs and premade meals, because they know what they need to get in and get out,”​ he said.

But, he added, consumers like choices and “if a consumer changes their mind about a product before scanning out, this indecision could create logjams in efficiency during a checkout process that is built for quick decision making and high traffic.”

To that point, Juan Jose Lopez Murphy, who leads Globant’s AI and data science practice, said the store model and corresponding app likely are not a final product, “but rather … a minimum viable product.”

He explained, “Amazon has invested a great amount of time and research to perfect the experience based on consumer behavior, but exposing it to the general clientele over a consistent period of time is the only way to fully understand how customers will behave. Amazon will have to iterate accordingly as small behavior nuances shake out in store and on the app.”

Cargo takes snacks on-the-go

Cargo, a completely new type of retail channel, also focuses on meeting consumers’ need for speed and convenience by offering a shopping solution that is literally on-the-go.

The startup markets a hardware and software-enabled in-car commerce platform that lets drivers of rideshare services sell snacks, beverages and other items to passengers – kind of like a vending machine on wheels.

cargo

After testing the concept in New York, Chicago and Boston to positive reviewers from drivers, who can earn a commission on the products sold, and riders the company is now primed to expand in new regions.

To help the company move into new markets, it announced Jan. 22 a combined investment of $5.5 million in seed preferred financing from CRCM Ventures and eighteen94 – Kellogg Co.’s venture capital fund and others.

Just as much as Cargo is about creating a new retail channel for on-the-go consumers, it also offers a strong marketing component for brands. The compartment in which products are stored in the car is clear so that consumers can easily select what they want to buy. But even they don’t buy product in the car, the featured brands gaining visibility and exposure that could translate to sales later.

Like Amazon Go, although even more so, the limited space in Cargo means brands will have to offer a distinct value to consumers in order to remain a featured item.

Current select brand partners include Mars Wrigley, Kellogg’s, RxBar, Michel et Augustin’s kooky cookies, Blowfish for Hangover, snacks from Pure Growth Organic and personal care items from Leaders Cosmetics USA. 

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