From big boxes to little boxes, companies the world over are trying to change the world of retail. We have Amazon Go and Bodega in the U.S. and BingoBox in China. Which one seems to have the most potential and what, if anything, does it mean for consumer packaged goods brands?
Convenience always wins might be a bit of an over-statement but it is not far from the truth. Take anything that meets people’s needs and which is a good price and people will be motivated to choose it. With this in mind different companies have been busy trying to envision the future of retail. What would make the shopping experience more convenient?
A couple of months ago I posted about Amazon’s experiment with the grab-and-go format of Amazon Go, only to get distracted by the purchase of Whole Foods. Of the two you could argue that Go has the bigger implications for the way we shop because of the way it reduces the friction in shopping for groceries.
As with all technology plays, the success of this venture depends on how easily the system copes with exceptions. A recent experience with an automated checkout in the Marks & Spencer grocery department reminded me that flexibility is not a technology strong point. The fact that I wanted to use a backpack to carry the groceries was only the first of several issues that required a sales assistant to help me complete my purchase. No wonder people end up cheating the system.
Then my colleague, Sirius Wang, brought BingoBox to my attention. BingoBox is a Chinese store that has marked similarities to Amazon Go except that it is already in over 10 cities and has plans to open 5000 boxes in the coming year. Customers use the ubiquitous WeChat to gain access to the store, scan the items they want and then pay with WeChat or Alipay. And while Amazon Go and WeChat share a heavy reliance on technology BingoBox comes on wheels so it can be moved from one location to another as the need arises.
The last example on my list takes us back to the U.S. where a start-up called Bodega is trying to disintermediate the local corner store (incidentally, the name of which has caused a degree of furor because of the problematic nature of taking the name of the very thing you are trying to render obsolete). Instead of having to go outside to buy groceries now you just go down the hall to the kiosk and get what you need. While the range of goods might be limited, Bodega plans to track purchases and periodically ask customers what might be missing that they would like.
In each of these three examples the business model will succeed or fail based on whether customers find the experience easier than the alternative. But what does it mean for brands? I see existing e-commerce models and voice-first purchasing as far more challenging than these variants on traditional retail because these leave the consumer as the decision maker not the technology.
Written by Nigel Hollis,Executive Vice President and Chief Global Analyst at Kantar Millward Brown.