Amazon Go and the Purchasing Power of the Millennial
Amazon recently released a video on YouTube, “Introducing Amazon Go and the world’s most advanced shopping technology.” The video envisions a near future where you enter an Amazon Go grocery store, pick out whatever you want and leave without waiting in line or interacting with a cashier. In fact, you do not even have to checkout. Amazon’s technology, which took four years to develop uses Computer Vision, Deep Learning Algorithms and Sensor Fusion, creating “Just Walk out Technology.” The video is captivating, enlightening and relatable. It quickly went viral landing almost 800,000 views in only four hours. That being said, I am not writing a critique on the cinematography of the two minute YouTube video. I am not writing because Amazon disabled the comments on the video, perhaps to ward off the internet warriors from posting hate comments on how this technology will remove humans from the supermarket checkout. I am writing because I believe the new grocer, launching in early 2017, at # 2131, 7th Ave Seattle, Washington — in case you happen to be in the neighbourhood — is a high-tech creation tailored distinctly to millennials.
There are eighty million millennials in the United States, making up almost a quarter of the entire population. They possess $200 billion in annual buying power. Accenture estimates that millennial spending will grow to $1.4 trillion by 2020. Brands are learning that they cannot sell to this demographic the same way they’ve sold to previous generations. A recent survey of 661 North American marketers displayed that 40% believe the emergence of millennials will have the biggest impact on their industry in the next decade, second only to mobile at 47%.
We need to consider, what’s so different about millennials from the Baby Boomers. For starters, the millennials have a far greater trust in technology. I can think of a number of people in their late 50’s early 60’s who would never venture into this Amazon grocer because they wouldn’t trust the software to accurately keep track of their expenses and secondly because they don’t know how to download an App. In contrast, 74% of millennials believe technology makes life easier, they trust it. It is centered on this notion of ease and efficiency. In this technological age, people are not used to waiting. Answers to questions are a click away, your morning coffee is ready before you enter a café and you never have to pick up your wallet to pay. Millennials are concerned about efficiency and instant gratification, associating value with ease and rapidity. They simply have shorter attention spans, in fact a recent study which asked millennials “What is the most important factor leading to their engagement with branded content?” 54% responded that it must be “brief.”
Fast, affordable, quality is exactly what Amazon is selling with Amazon Go. Frankly, I don’t know what could be more appealing to someone in this market. Millennials have an expectation that they can have whatever they want, whenever they want it. Amazon has brilliantly played to these consumer behaviours in the launch of Amazon Go. This group does not see an advantage in chatting with the cashier about the weather while their produce and other food items are being bagged. They want to enter Amazon’s store, accessing exactly what they want and leave before someone can say “Walmart.” Today, this is not possible, but in January, it will be.
The process is simple, you scan the barcode of your App on the way in, pick out whatever you like and leave. The Sensor Fusion detects food being picked up and taken; adding it to the virtual cart on your App, and charging you once you exit the store. The sensors also detect when an item has been picked up, looked at and put back. It is incredible to ponder the amount of data these sensors will give Amazon employees on brands and products in their store, detailing consumer choice selection. The A.I. and Fusion Sensor in-store technology will benefit Amazon immensely in understanding their consumer’s behaviour, allowing them to constantly adapt to the buyer and create a truly satisfying shopping experience. Amazon has shaped this technology around the interest and behaviour of millennials; it will be a successful launch in January.