Amazon has graced us with an impeccable vision of what shopping looks like in 2030. They’ve distributed over 100 million virtual storefronts and a personal shopper named Alexa for each person. They’ve given us the innovation that physical storefronts have needed for years with their Amazon Go stores. Either we’re too stubborn to believe these will actually work or too short-sighted to see the grander strategy in place.
Future of Conversational Shopping
With over 10,000 employees working on Alexa, Amazon definitely believes voice interfaces are a critical part of our future. Exactly how voice interfaces will contribute to our lives – outside of turning on and off the lights – nobody truly knows.
Ben Evans, Partner at Andreessen Horowitz, argues that Alexa has found product-market fit for consumers, but not for Amazon. In other words, people are using them to conveniently play music, set kitchen timers, and control their lights – Alexa fits in people’s lives. However, Alexa doesn’t fit in Amazon’s business model, which is to sell products. Currently, buying products through Alexa just isn’t that great and therefore doesn’t add much value to Amazon.
However, Ben goes on to point out that it’s possible that Alexa will add value in other ways:
Alexa’s capability to control ‘smart home’ devices might expand to enable more delivery models (‘open the garage door automatically when an Amazon delivery robot arrives’, or more prosaically just ‘unlock the door for the FedEx delivery’, and send me a video of it happening), or more automated ordering (the washing machine can order more soap for itself, perhaps). Another thing to ponder is the ways that brands can use Alexa to help customers with products. For example, there could be an Alexa skill that talks you through how to use a product when you need ongoing instructions and can’t use your hands. I don’t know what the answer is, and that’s really the point – Amazon is deep in experimentation mode.Ben Evans
I would agree with Ben’s last point that Amazon is deep in experimentation mode. However, I do believe that Alexa has a product-market fit for Amazon. They’ve already achieved the massive feat of getting 100 million Alexa-enabled devices in homes nationwide. They have created the portal through which people can buy products audibly and simultaneously distributed that portal to millions of homes.
That accessibility is absurd in comparison to the 7-11 down the street – especially once Amazon can figure out how to deliver a large number of their goods in two hours or less (more on this later in the article). Alexa is becoming the virtual store shelf that is waiting to be browsed. Once buyers (Alexa owners) are properly educated on how to buy products through this voice technology, products will be flying off Alexa’s virtual shelves.
What’s fascinating about these virtual shelves is that Amazon controls everything about them (what products get premium placement) and is vastly ahead of all competition (Walmart doesn’t have this type of reach and understanding of their customer).
It’s important to note, though, that Alexa is not going to completely replace shopping in physical spaces. For that, Amazon is continuing to roll out its convenient and “cashierless” stores better known as Amazon Go.
Future of Physical Shopping
Amazon Go is slowly moving along, introducing more and more of them in cities that are responding well. Chicago recently opened their fourth installment of Amazon Go. They’re in the process of fine-tuning their Just Walk Out technology, which is going to have massive implications and ultimately be applied in a variety of other venues.
For instance, I think the Just Walk Out technology makes a lot of sense in the airport setting. If you’ve ever been traveling on a time crunch, you know that gut-wrenching feeling when you’re waiting in line to buy a soda while your flight is boarding. Just Walk Out technology would alleviate all the time sensitivities associated with getting food, beverages, and trinkets in an airport.
Sports stadiums would be successful for similar reasons. Long lines for the hot dog stand can be frustrating, especially if you’re missing a crucial part of the game. Add in a layer of drunkenness and it’s a recipe for many feuds between strangers. Just Walk Out technology would be very swift in this setting.
Lastly, college cafeterias seem to be a low hanging fruit since many of them already operate under the “a-la-carte” process and just adding the layer of technology to student IDs would alleviate the lines that build up there. This might even coordinate in some way with the Prime Student program they offer for undergraduate students.
Between Alexa-enabled shopping experiences and their implementation of Just Walk Out technology in stores, Amazon is showing us how we’ll purchase physical goods in the future. How will we receive them, though?