Amazon the tip of the iceberg

amazon-no-check-out-dec-2016With one third of USA retail growth revenue and 50 per cent of all U.S  online sales, Amazon continues to disrupt and redefine the way in which retail is done. While industry experts in our domestic sector identify higher margin sectors that Amazon will target, we take a somewhat broader perspective to their potential impact in our countries retail offer.

The power of their offer is certainly the integrated networks they develop, revolutionary supply channel and the like, however it is data and its innovation, evolution, adaption, connection  and ultimately predictive qualities that is, and will, transform the way many consumers view retail.

In his famous 1997 speech to shareholders, Jeff Bezos proclaimed that they would be the most customer centric organisation on the earth, and they are achieving this through the mantra that I describe.

Richard Umbers CEO of Myer spoke at our breakfast event in Melbourne last week and among many of the gems he delivered was this acknowledgement of the power of data in revolutionising retail and the building of ‘localised scale’.

Imagine every single channel that we utilise from our TV, online, social, physical and mobile, as an integrated ecosystem that knows more about us than our family and is available to us every second of every hour. And most relevant is that this machine is not talking to a market, it speaks to you or I, in a data enriched personalised way.

Imagine a cash register-less store with little or no staffing costs, sales registered to your account and absolutely no need for cash or credit cards, one single account across all categories and data of enormous value to suppliers, planners, marketplaces and so on.

This from USA today;

Amazon is testing a grocery store in downtown Seattle that lets customers walk in, grab food from the shelves and walk out again, without ever having to stand in a checkout line. Customers tap their cell phones on a turnstile as they walk into the store, which logs them into the store’s network and connects to their Amazon Prime account through an app. The service is called Amazon Go. It uses machine learning, sensors and artificial intelligence to track items customers pick up. These are then added to the virtual cart on their app. If they pick up an item they later decide they don’t want, putting it back on the shelf removes it from their cart.

The Seattle-based company calls it, “Just walk out technology.” When the customer leaves, the app adds up everything the customer has taken and charges their Amazon account. Amazon said it began to work on the project in 2012. It is currently being tested by Amazon employees at the location at 2131 7th Ave., near Amazon’s offices, but will open to the public in early 2017, the company said.

It’s not one adaptation or innovation in any one channel that defines the Amazon onslaught it is the composite aggregate effect.

Customer insights, strategic differentiation and the building of a “fit” retail deployment and community will achieve even more significance.

2017 may well prove to be the introduction of Amazon to Australia, raising the bar for Australian retailers that one (or possibly 10) more degrees.

Invest in your business model early before customers divest.

Brian Walker is founder and CEO of Retail Doctor Group and can be contacted on (02) 9460 2882 or


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