Do People Really Want Amazon’s Latest Innovation? – Barron’s
So far, Amazon has one Go store, which opened to employees in Seattle late last year. It’s not clear how many stores will eventually open.
The company has highlighted the checkout innovation as a key selling point for the new stores.
But according to a Morgan Stanley report published Friday, most people don’t see a quick checkout as a particularly big deal. In fact, it was an important factor for only about 30% of the people they surveyed, versus 50% who cared about prices and 70% who wanted a convenient location. Also more important than quick checkout: selection, high-quality products, and good weekly sales and promotions.
What’s more, Amazon’s advantage in checkout times is already narrowing. Traditional grocery stores have made progress at reducing times considerably — Kroger lowered its average checkout wait time to 30 seconds from 3-4 minutes historically, according to Morgan Stanley. And Wal-Mart’s mobile app now allows for quick scan and go purchases at Sam’s Club.
“While frictionless shopping differentiates ‘Go’, it is unclear if this is enough to make the concept viable long-term,” analyst Vincent Sinisi wrote. Sinisi nonetheless finds the Go concept intriguing, as the U.S. grocery market is worth $770 billion, and this is one way for Amazon to tap into it.
Big Picture: Amazon is excited about its new Amazon Go food markets, where people can check out using just their smartphones. But consumers don’t care that much about quick checkout compared to other factors.